New Delhi: The Central Government has defended the recent increase in domestic LPG prices, stating that cooking gas in India continues to be significantly cheaper than prevailing international market rates despite a sharp rise in global energy prices. Officials have maintained that the government is absorbing a substantial portion of the cost burden to shield households from the full impact of global fuel volatility.
The clarification comes after the price of a 14.2 kg domestic LPG cylinder was increased by ₹29. Following the latest revision, the retail price of a domestic cylinder in Delhi has risen to ₹942. However, according to the Petroleum Ministry, the actual market linked cost of supplying a cylinder has crossed ₹1,600 due to disruptions in global energy markets and rising import costs.
Government officials said the surge in international LPG prices has been driven largely by tensions in West Asia and disruptions in key energy supply routes, particularly the Strait of Hormuz. India imports a significant share of its LPG requirements, and domestic prices are linked to the Saudi Contract Price, a key global benchmark for LPG. Since February, international benchmark prices have reportedly increased by around 46 per cent.
Despite the increase, the Centre argues that Indian consumers continue to receive cooking gas at rates lower than those prevailing in several neighbouring countries as well as many developed economies. The government has highlighted that beneficiaries under the Pradhan Mantri Ujjwala Yojana continue to receive a subsidy of ₹300 per cylinder on eligible refills, reducing their effective cost to around ₹642 per cylinder.
Officials further revealed that state run oil marketing companies are currently incurring substantial losses on domestic LPG sales. According to government estimates, oil companies are losing nearly ₹700 on every domestic cylinder sold despite the latest price increase. The under recovery burden on LPG sales has reportedly risen sharply over the past year, prompting the government to provide financial compensation to support public sector fuel retailers.
The latest hike has, however, triggered criticism from opposition parties, which argue that rising LPG prices are placing additional pressure on household budgets already affected by inflation. Several opposition leaders have demanded a rollback of the increase, claiming that cooking gas has become increasingly unaffordable for middle class and lower income families.
Energy analysts note that India’s LPG pricing remains heavily influenced by international market conditions. While the government has attempted to moderate the impact on consumers through subsidies and controlled pricing, sustained volatility in global energy markets could continue to pose challenges in balancing consumer relief and financial viability for oil companies.
As global energy uncertainties persist, the debate over fuel pricing is likely to remain a key economic and political issue. For consumers, the government’s position is that despite recent increases, domestic LPG continues to be sold well below its actual market linked cost, with public sector companies and the exchequer absorbing a significant share of the burden.