LPG under-recoveries of PSU oil firms cross ₹59,000 crore in July
New Delhi: State-run oil marketing companies (OMCs) have accumulated more than ₹59,000 crore in under-recoveries from the sale of domestic cooking gas as of 31
New Delhi: State-run oil marketing companies (OMCs) have accumulated more than ₹59,000 crore in under-recoveries from the sale of domestic cooking gas as of 31 July, up from around ₹51,000 crore at the end of June, as the war in West Asia disrupted LPG supplies and pushed up global prices. However, in a written reply to a question in the Rajya Sabha, Union minister of state for petroleum and natural gas Suresh Gopi said on Monday that the under-recovery per cylinder has fallen sharply in August to ₹188 per 14.2-kg cylinder, from more than ₹500 in July, as global LPG (liquefied petroleum gas) prices have eased from their recent peaks. Also Read | Rajya Sabha passes bill to recognize digital bank records as evidence Gopi told the upper house that the government has ensured availability of domestic LPG at affordable prices to households, for which it has been compensating OMCs for selling below market-linked prices.
“...government has paid to the OMCs a compensation of ₹22,000 crore in FY 2022-23 and paying ₹30,000 crore during FY 2025-26 and FY 2026-27. Even after the payment of this compensation, accumulated under-recoveries of the PSU OMCs on domestic LPG were more than ₹59,000 crore as of 31st July, 2026 itself”, Gopi said. Under-recovery refers to a notional loss for the OMCs on the retail sales compared to global retail rates of the fuel. Domestic LPG prices have risen by a cumulative ₹89 per cylinder since the war began on 28 February 2026, including a ₹29 increase in June. The retail price of a 14.2-kg cylinder in New Delhi has since been maintained at ₹942, the minister said.
Describing the gap between the retail selling price (RSP) and market-linked price as an “implicit subsidy”, Gopi said the under-recovery on domestic LPG sales in New Delhi exceeded ₹700 per cylinder in June and stood at ₹500 in July. Also Read | Lok Sabha passes Tribunals Reforms Bill “Even for the month of August 2026, the RSP of 14.2 Kg cylinder carries an implicit subsidy of ₹188 per cylinder. For more than 10.5 crore PMUY consumers, the effective price is only ₹642 per cylinder (up to 4 refills per year), after a targeted subsidy of ₹300 per cylinder,” he said. LPG supplies were among the areas most affected by the war because India relied on West Asia for about 90% of its cooking gas imports before the conflict.
Qatar, Saudi Arabia, the UAE and Kuwait were the main suppliers. During the conflict, however, the US emerged as India's largest supplier of LPG. India imports about 65% of its annual LPG requirement of 33 million tonnes, resulting in an import bill of nearly $11 billion.
The BriefWire