According to a TOI report by Atul Mathur, the government said the cost of supplying a domestic LPG cylinder has risen to over ₹1,600 due to higher international LPG prices. It attributed the increase to a sharp rise in global energy prices following the West Asia conflict, which disrupted supplies and pushed up benchmark Saudi Contract Prices (CP).
Also read: Oil India reports natural gas presence in second Andaman offshore well
According to the government, Saudi CP increased nearly 46% from $543 per tonne before the disruption to $775 per tonne in May and has further risen to $790 per tonne in June.
While prices of petroleum products in India are linked to international benchmarks, the government said it had moderated the effective price paid by domestic consumers and kept it below levels prevailing in several other countries.
Following the latest revision, a 14.2-kg domestic LPG cylinder in Delhi costs ₹942, compared with ₹913 earlier. Beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) will pay an effective ₹642 per cylinder after receiving a subsidy of ₹300 per refill.
However, PMUY beneficiaries will now receive the subsidy on four refills annually, compared with nine refills announced last year.The latest revision marks the second increase in domestic LPG prices since energy supplies were disrupted following the closure of the Strait of Hormuz amid the conflict. Domestic LPG prices were raised by ₹60 per cylinder in March.
Commercial LPG prices, which are deregulated, have been revised five times during the same period. OMCs have also increased petrol, diesel and CNG prices four times each in an effort to partially offset losses arising from higher global crude oil and natural gas prices.
The price of a 19-kg commercial LPG cylinder, commonly used by hotels and businesses, is revised monthly based on international benchmark rates. In Delhi, it currently costs ₹3,113.50, translating to about ₹164 per kg. By comparison, domestic LPG consumers pay around ₹66 per kg following the latest revision.
The government said that during a period of significant increases in international costs, a substantial portion of the burden had been absorbed rather than fully passed on to consumers.
Also read: Venezuela third largest supplier of crude to India in May
It added that the under-recovery is separate from the subsidy component and represents the gap between international costs and the regulated retail price. The under-recovery on domestic LPG is estimated at around ₹60,000 crore in FY26, up from ₹41,338 crore in the previous fiscal year.
The government also said there is no shortage of petroleum products despite disruptions in global supply chains. It noted that around 54% of India’s LPG imports transit through the Strait of Hormuz, which has remained affected by the conflict.
To mitigate supply constraints, domestic refiners increased LPG production by more than 60%, from 32,000 tonnes per day to 52,000 tonnes per day, according to the government.
With inputs from TOI