Oil marketing companies losing nearly Rs 700 per domestic LPG cylinder, says government
NEW DELHI: Oil marketing companies are still incurring an under-recovery of nearly Rs 700 on every domestic LPG cylinder despite the Rs 29 increase in
NEW DELHI: Oil marketing companies are still incurring an under-recovery of nearly Rs 700 on every domestic LPG cylinder despite the Rs 29 increase in the price of cooking gas refills, the government said on Sunday.Despite a global surge in energy prices following the West Asia conflict and the benchmark Saudi CP rising nearly 46% — from $543 a tonne before the disruption to $775 a tonne in May — the government said it had moderated the effective price paid by domestic consumers and kept it well below levels prevailing in many countries. Saudi CP has further increased to $790 a tonne in June, it said.Prices of petroleum products in India are linked to corresponding international benchmarks.
The cost of supplying a domestic LPG cylinder has risen to more than Rs 1,600, the government said.While a 14.2-kg domestic LPG cylinder in the capital now costs Rs 942, up from Rs 913, beneficiaries of the Pradhan Mantri Ujjwala Yojana will pay an effective Rs 642 per cylinder after receiving a subsidy of Rs 300 per refill. PMUY beneficiaries, however, will now receive the subsidy on only four refills a year, down from nine refills announced last year.This is the second increase in domestic LPG prices since energy supplies were disrupted by the closure of the Strait of Hormuz due to the conflict, following a Rs 60-per-cylinder hike in March.
Prices of commercial LPG are deregulated and have been revised five times during this period.Oil retailers have also raised petrol, diesel and CNG prices four times each to partly offset losses arising from higher global crude oil and gas prices.The price of a 19-kg commercial LPG cylinder, used by hotels and businesses, is revised automatically every month as a direct pass-through of international benchmark rates. It currently costs Rs 3,113.5 in the capital, or about Rs 164 per kg, while a domestic consumer pays about Rs 66 per kg after the latest revision.“Through a period of sharp international cost increases, that burden has been absorbed upstream rather than passed on to the consumer,” government said in a statement.
It added that under-recovery was separate from the subsidy — the gap between the international cost and the regulated retail price – which is estimated at Rs 60,000 crore in FY26, up from Rs 41,338 crore in the previous year.Despite 54% of India’s LPG imports transiting through the Strait of Hormuz before the conflict, which remains disrupted, government said there was no shortage of any petroleum product. Refiners also ramped up domestic LPG production by more than 60% — from 32,000 tonnes a day to 52,000 tonnes a day — to offset constrained imports, it said.
The BriefWire