The price of a 14.2-kg domestic LPG cylinder in Delhi was raised to ₹942 from ₹913 on Saturday, taking the cumulative increase since March to ₹89 per cylinder, even as the government said the actual import-linked cost of supplying cooking gas has surged to more than ₹1,600 per cylinder following disruptions in West Asia and a sharp rise in global LPG prices.
The statement comes amid mounting losses for state-run oil marketing companies as international LPG prices remain elevated following the West Asia crisis. Even after the latest ₹29 hike, households are paying ₹942 per cylinder against an import-linked cost exceeding ₹1,600, leaving a gap of over ₹650 per cylinder that is being absorbed through government support and under-recoveries borne by fuel retailers.
In a statement issued a day after the hike, the government said international LPG prices have risen sharply after the closure of the Strait of Hormuz disrupted supplies from the Middle East Gulf, a region that accounts for the bulk of India’s LPG imports.
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Saudi Benchmark Spike
India’s LPG import costs are linked to the Saudi Contract Price (CP), the global benchmark for the fuel. According to the government, the benchmark for the propane-butane blend used in India rose from around USD 543 per tonne in February before the crisis to USD 775 per tonne in April, and further to about USD 790 per tonne in June, representing a jump of nearly 46%.
The surge has significantly widened losses on domestic LPG sales. The government said cumulative under-recoveries on domestic cooking gas climbed to around ₹60,000 crore in the previous financial year, up from ₹41,338 crore a year earlier. Prior to the latest price revision, state-run fuel retailers were estimated to be losing around ₹703 on every cylinder sold.
To partly offset these losses, the Union Cabinet has approved ₹30,000 crore in compensation to public sector oil marketing companies.
“The prices of petroleum products in India are linked to the corresponding prices in the international market. The government, however, continues to modulate the effective price to the consumer for domestic LPG,” the statement said.
The government also highlighted that beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY) continue to receive a subsidy of ₹300 per cylinder on the first four refills every year. As a result, more than 10.58 crore Ujjwala beneficiaries pay an effective price of ₹642 per cylinder, despite the latest revision.
The divergence between household and market-linked LPG prices is also visible in the commercial segment. The 19-kg commercial LPG cylinder used by hotels and restaurants is currently priced at ₹3,113.50 in Delhi after five revisions during the West Asia crisis, equivalent to around ₹164 per kg, compared with roughly ₹66 per kg paid by domestic consumers.
Supply Diversification
The government said India managed to maintain uninterrupted LPG supplies despite disruptions in the Strait of Hormuz, through which around 54% of India’s LPG imports are transported. To safeguard supplies, domestic LPG production was increased by more than 60%, from about 32,000 tonnes per day to 52,000 tonnes per day, while imports were diversified to suppliers including the United States, Canada and Algeria.
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The statement said the latest price revision seeks to balance consumer protection with energy security and uninterrupted availability of cooking fuel as global LPG markets continue to face volatility from the ongoing West Asia conflict.
TOPICSLPG cylindersThis article was first uploaded on June seven, twenty twenty-six, at eighteen minutes past six in the evening. © The Indian Express (P) Ltd