Good news or shock? Preparation to change the entire mathematics of domestic gas cylinder subsidy, know what will be the impact on your pocket!

A big stir has started in India regarding the price of LPG and the subsidy on it. If you also book cylinder every month, then this news is very important for you. Actually, the central government is now considering changing the old method of calculating LPG subsidy. The main reason behind this change is a big agreement made by government oil companies with American exporters.

Why is the subsidy formula changing?

Till now the subsidy in our country is calculated on the basis of ‘Saudi Contract Price’ (CP). It is considered a standard for gas coming from West Asia. But now there has been a twist in the story. Indian oil companies have now demanded to include the American standard price and the huge logistics cost of bringing gas from there in the subsidy formula. Experts say that importing gas from America will be beneficial only when the prices there are much lower than Saudi Arabia, because the cost of transporting goods from America is about four times more than that from Saudi Arabia.

Big deal signed with America for the first time

The country’s leading oil companies—Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) have taken a historic step. These companies have signed an agreement to import 2.2 million metric tons of LPG annually from America for the year 2026. This accounts for about 10 percent of India’s total annual consumption. Although India has been buying gas from the US sporadically in the past, this is the first time a contract has been signed for such a long period. At present, the government compensates (subsidizes) the losses incurred by oil companies for selling gas below the market price.

Will the burden on your pocket increase?

The biggest question is whether gas cylinders are going to be expensive? Since the cost of bringing gas from America is four times more than that of Saudi Arabia, the whole responsibility depends on how much discount American companies give. If the prices of gas supplied from America do not remain low and the government changes the old subsidy formula, then there may be a cut in the subsidy of the common man in the coming days. This can have a direct impact not only on the ordinary customers but also on crores of beneficiaries of the Ujjwala scheme, who may have to buy expensive cylinders in future.

Current prices and status of beneficiaries

If we talk about Delhi, at present domestic gas cylinder (with subsidy) is available for Rs 853, while the price of commercial cylinder is Rs 1,580.50. The last time domestic cylinder prices were increased by Rs 50 on April 8, 2025. Talking about Ujjwala scheme, currently a subsidy of Rs 300 is being given under it. According to the data till December 1, 2025, the number of Ujjwala beneficiaries in the country has reached 10.35 crore, while the total number of LPG consumers in the country is around 33 crore. Now it remains to be seen whether these crores of people get relief from this new mathematics of subsidy or it is another blow to inflation.