The prices of domestic LPG (LPG) cylinders have been increased once again in the country. An increase of Rs 29 in the price of 14.2 kg domestic LPG cylinder has come into effect from Saturday (June 6). After this, the price of one cylinder in Delhi has increased from Rs 913 to Rs 942. This is the second increase in the last three months. Earlier on March 7, cylinder prices were increased by Rs 60.
According to the government, there has been a sharp rise in LPG prices in the international market due to the ongoing conflict in West Asia and supply disruption around the Strait of Hormuz. For this reason, financial pressure on government oil marketing companies has increased.
The Petroleum Ministry has defended the increased prices, saying that despite the huge increase in international prices, Indian consumers are getting the benefit of one of the lowest LPG prices in the world. According to the ministry, the actual supply cost of a 14.2 kg LPG cylinder has reached more than Rs 1,600, while an ordinary consumer in Delhi will have to pay only Rs 942 for it.
The government said that beneficiaries of the Pradhan Mantri Ujjwala Yojana will continue to get a direct subsidy of Rs 300 per cylinder on the first four refills. Under this scheme, the effective price of the cylinder for the beneficiaries comes down to Rs 642.
The ministry said non-Ujjwala consumers are also paying about Rs 700 less than the market-based actual price. India imports more than 60 percent of its total LPG requirement. The cost of these imports is based on the Saudi Contract Price (SCP) set by Saudi Aramco.
According to government data, the SCR of LPG was around $522 per tonne in January, which increased to $775 per tonne by April following the supply crisis in West Asia. That means it has increased by about 50 percent.
The government says the current increase is only a small part of the total increase in global prices and the remaining burden is being borne by state-owned oil companies. According to official estimates, government oil marketing companies are still incurring a loss of Rs 600 to Rs 700 on each domestic LPG cylinder. Under-recovery on domestic LPG is estimated to reach Rs 60,000 crore in 2025-26, compared to Rs 41,338 crore in the previous financial year.
To reduce this burden, the Central Government has approved providing assistance of Rs 30,000 crore to oil companies. Apart from LPG, the prices of petrol, diesel and CNG have also increased in recent months. The government says that it has not passed the entire burden of increased energy costs in the international market on consumers, while the opposition is calling it a move that will increase inflation.
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