Domestic LPG Prices Rise Again by Rs 29; Second Increase in Three Months

Households across India are set to face another increase in cooking expenses as domestic LPG cylinder prices have been raised once again. The latest hike reflects ongoing financial strain on oil marketing companies amid rising global energy costs.

LPG Prices Increased Across India

Starting June 7, the price of domestic LPG cylinders has been increased by Rs 29, marking the second price hike within a span of three months. This revision directly impacts millions of households that rely on LPG for daily cooking needs. With this increase, the cost of a standard 14.2-kg LPG cylinder in Delhi has risen from Rs 913 to Rs 942, according to industry estimates.

This upward revision follows an earlier hike of Rs 60 implemented on March 7, indicating a continued trend of rising fuel costs in the country. The frequent adjustments in LPG pricing reflect deeper structural challenges within the energy sector, especially for government-owned fuel retailers.

Oil Companies Continue to Face Heavy Losses

Despite repeated price hikes, oil marketing companies (OMCs) are still experiencing significant financial losses on domestic LPG sales. Industry insiders estimate that before the latest revision, these companies were incurring losses of approximately Rs 703 per cylinder.

The recent increase is seen as a partial attempt to reduce these losses rather than fully recover costs. Even after the revision, under-recoveries remain substantial, suggesting that consumers may face further hikes in the future if global energy prices remain elevated.

Broader Fuel Price Increases Add Pressure

The LPG price hike is part of a broader trend of rising fuel costs in India. Since mid-May, petrol and diesel prices have increased cumulatively by around Rs 7.50 per litre. Additionally, compressed natural gas (CNG) prices have risen by approximately Rs 6 per kilogram.

These increases indicate a wider impact of global energy market fluctuations on domestic fuel pricing. Oil companies are reportedly facing under-recoveries of about Rs 11 per litre on petrol and Rs 33.6 per litre on diesel, further adding to their financial burden.

Government Absorbing Part of the Burden

To shield consumers from the full impact of rising international energy prices, the government has not completely passed on the increased costs. Instead, state-run fuel retailers are absorbing a portion of these expenses.

This approach helps maintain price stability for consumers but puts additional pressure on oil companies. The balancing act between protecting consumers and ensuring financial viability of fuel retailers remains a key policy challenge.

Official Statement on LPG Under-Recoveries

At a recent inter-ministerial briefing, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, highlighted the ongoing issue of under-recoveries on domestic LPG cylinders.

She stated that losses on each cylinder continue to remain close to Rs 700, even after recent price adjustments. This underscores the persistent gap between market prices and consumer pricing, driven largely by government intervention and global cost pressures.

Measures to Stabilize Supply and Demand

The government has undertaken several initiatives to improve the balance between LPG supply and demand. These include boosting domestic production and ensuring steady imports to meet consumption needs.

According to officials, around 54 thousand metric tonnes (TMT) of LPG were sourced from domestic production recently, indicating efforts to reduce dependency on imports. Strengthening domestic supply chains is seen as a critical step toward stabilizing prices in the long term.

Changing Consumption Patterns Impact Demand

Interestingly, LPG demand has shown signs of moderation in recent months. This decline is attributed to several factors, including reduced consumption by commercial and industrial users, shifts in booking cycles, and the implementation of Delivery Authentication Code (DAC)-based delivery systems.

These changes have helped streamline distribution and reduce inefficiencies, although they have not significantly offset the financial challenges faced by oil companies.

Stable Fuel Supply Despite Global Tensions

Despite ongoing geopolitical tensions in West Asia, which is a major hub for global energy supplies, India’s fuel supply chain remains stable. Officials have confirmed that there is no immediate shortage of crude oil, LPG, or natural gas.

The country maintains adequate stock levels of essential fuels such as petrol, diesel, and LPG. Additionally, Indian refineries are operating at optimal capacity to ensure uninterrupted supply across regions.

Conclusion

The latest LPG price hike highlights the complex interplay between global energy markets, government policy, and domestic economic realities. While efforts are being made to cushion consumers from steep increases, the financial strain on oil companies remains significant.

Going forward, further price revisions cannot be ruled out if global energy costs continue to rise. For now, households must brace for higher cooking expenses as India navigates a challenging energy landscape.