The Central Government on Sunday said that Indian households continue to enjoy some of the lowest cooking gas prices in the world despite a recent increase in domestic LPG rates, attributing the hike to a sharp rise in international fuel prices triggered by disruptions in West Asia.
The statement comes a day after the price of a 14.2-kg domestic LPG cylinder was increased by Rs 29, taking the retail price in Delhi from Rs 913 to Rs 942 per cylinder.
However, beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) will continue to receive a subsidy of Rs 300 per cylinder, effectively paying Rs 642 per refill. The subsidy will be available on the first four refills annually.
The latest revision follows a Rs 60-per-cylinder increase announced on March 7, bringing the cumulative hike in domestic LPG prices to Rs 89 per cylinder this year.
According to the Government, the cost of supplying a domestic LPG cylinder has risen to more than Rs 1,600 due to a sharp increase in global LPG prices following the outbreak of conflict in West Asia earlier this year.
India’s LPG import prices are linked to the Saudi Contract Price (CP), the internationally accepted benchmark for LPG. The benchmark has reportedly surged by around 46 percent since February, largely due to supply disruptions associated with tensions around the Strait of Hormuz, a critical global energy transit route.
Despite rising import costs, the Government maintained that domestic LPG prices in India remain significantly lower than those in neighbouring countries, including Pakistan, Nepal, Bangladesh, and Sri Lanka. Prices are also considerably below those prevailing in developed economies such as the United States, Australia, and Canada.
The Government further highlighted India’s ability to maintain uninterrupted energy imports through the Strait of Hormuz during the ongoing regional crisis. It said proactive measures, including increased domestic production and diversification of import sources, helped prevent shortages of LPG and other petroleum products across the country.
State-run oil marketing companies (OMCs) have been bearing substantial losses on domestic LPG sales. Before the latest price revision, OMCs were reportedly losing around Rs 703 on every LPG cylinder sold.
The Government stated that cumulative under-recoveries on domestic LPG sales reached approximately Rs 60,000 crore by the end of the previous financial year, up from Rs 41,338 crore a year earlier.
To partially compensate for these losses, the Union Cabinet has approved financial assistance of Rs 30,000 crore for state-run oil marketing companies.
The Government reiterated its commitment to ensuring affordable cooking fuel for consumers while balancing the impact of rising global energy prices and maintaining uninterrupted supplies across the country.
