Domestic LPG gets dearer by ₹29, rises to ₹942 in Delhi; second hike in 3 months

Domestic cooking gas LPG prices have been raised by ₹29 per 14.2-kg cylinder, taking the Delhi rate to ₹942 from ₹913, even as the government said Indian households continue to pay among the lowest cooking-gas prices globally despite a sharp jump in international LPG costs after the West Asia conflict. The latest revision follows a ₹60-per-cylinder hike on March 7, taking the cumulative increase to ₹89 since then.

The government said beneficiaries under the Pradhan Mantri Ujjwala Yojana will continue to pay an effective ₹642 per cylinder after a ₹300 subsidy on the first four refills every year. It said the subsidy support is unchanged, and the annual refill count under the scheme remains broadly in line with the typical consumption pattern of Ujjwala households.

Global benchmark has surged

According to the government statement, the cost of supplying a domestic LPG cylinder has risen to more than ₹1,600 after international prices jumped sharply following the outbreak of war in West Asia at the end of February. India’s LPG import cost is linked to the Saudi Contract Price, which the government said has risen about 46% since February as disruptions around the Strait of Hormuz tightened supplies from the Gulf region.

The statement said the benchmark rose from about $543 a tonne in February to $775 in April, and has edged up further to about $790 a tonne in June. The government also said India was able to keep LPG and other petroleum product supplies uninterrupted through the crisis by increasing domestic LPG production and diversifying imports to suppliers such as the US, Canada and Algeria.

Under-recoveries remain heavy

The revision also comes against the backdrop of large under-recoveries for state-run oil marketing companies. The government said cumulative under-recoveries on domestic LPG sales rose to about ₹60,000 crore by the end of the last financial year, compared with ₹41,338 crore a year earlier, and the Union Cabinet has approved ₹30,000 crore in compensation to partly offset those losses.

The statement said the latest move balances the need to shield households from volatile global energy prices with the need to ensure stable fuel supplies. It also pointed out that even after the revision, domestic LPG remains below prices in neighbouring countries such as Pakistan, Nepal, Bangladesh and Sri Lanka, and far below rates in advanced economies including the US, Australia and Canada.

The government drew a sharp contrast between domestic and commercial LPG pricing. It said the 19-kg commercial cylinder used by hotels and restaurants sells in Delhi at ₹3,113.50, or about ₹164 a kg, after five hikes during the West Asia crisis, while the domestic household cylinder works out to about ₹66 a kg after the latest revision.

It also said India used to import about 60% of its LPG needs, and that the landed cost of those imports tracks the Saudi benchmark. While commercial cylinders are revised automatically every month because they are a direct pass-through, domestic LPG remains regulated to cushion households from sudden global shocks.