LPG cylinder prices hiked by another ₹29 as West Asia war drives up import costs
State-run oil marketing companies (OMCs) have raised domestic liquified petroleum gas (LPG) cylinder prices by ₹29, effective 7 June. This is the second hike since
State-run oil marketing companies (OMCs) have raised domestic liquified petroleum gas (LPG) cylinder prices by ₹29, effective 7 June. This is the second hike since the start of the West Asia war. It comes after India's LPG consumption fell to 2.13 million tonnes in May, the lowest since the covid pandemic, and almost three months after oil companies hiked LPG prices by ₹60 a cylinder on 7 March. After the latest revision, a 14.2-kg domestic LPG cylinder will now cost ₹942 in Delhi, ₹941.50 in Mumbai, ₹994 in Hyderabad, ₹968 in Kolkata and ₹944.50 in Bengaluru, according to industry estimates. Also Read | OMCs tap tax data to tighten LPG subsidy amid energy crunch After the OMCs raised prices, the union government said in a statement that the added cost of supplying a 14.2-kg domestic LPG cylinder hasn’t been transferred completely to consumers and that Indian households continue to pay among the lowest cooking gas prices in the world. A beneficiary under the Pradhan Mantri Ujjwala Yojana will continue to receive the direct benefit transfer of ₹300 a cylinder on the first four refills each year. A typical Ujjwala household gets four refills a year and effectively pays ₹642 for those refills, according to the government. The government said the under-recovery on the sale of each domestic LPG cylinder was around ₹700 before the price hike.
It said if domestic LPG prices were linked to international rates, each cylinder would cost ₹1,600. Under-recovery is the gap between the international cost of the molecule and the domestic retail price. The gap is usually absorbed by the public sector marketing companies and compensated in part by the exchequer. By the end of the last financial year, the cumulative under-recovery on domestic LPG reached ₹60,000 crore, up from ₹41,338 crore the year before. The latest price increase follows disruptions in global energy markets caused by blockades of the Strait of Hormuz, a critical trade route that handles one-fifth of the world's oil and natural gas exports. Since the US-Iran war started on 28 February, the fuel prices have been volatile around the world, with Brent crude, the global oil benchmark, trading around $100 per barrel. Also Read | Govt weighs LPG stock mandate as West Asia war hits supply Commercial LPG prices have seen a much sharper increase in the past few months, as they are linked directly to the international benchmark. In the national capital, a 19-kg commercial cylinder, mostly used in hotels and restaurants, is priced at ₹3,113.50. LPG hit hardest by war LPG supplies have been worst-affected due to the war and the blockade of the Strait of Hormuz as India used to import 60% of its LPG before the war, with about 90% these imports coming from West Asia.
