LPG Cylinder Price: Subsidy formula on domestic gas cylinders to change; Possibility of rate hike

• Change in subsidy due to agreement with US
• Will domestic gas cylinders become more expensive?
• Domestic gas cylinder price hiked by Rs

LPG Cylinder Price: Domestic gas cylinder i.e. LPG price is going to change. Last month, state-owned oil companies signed annual supply contracts with US exporters. As a result, there is talk that the government is considering a change in the LPG subsidy formula. Currently, the subsidy is based on the Saudi Contract Price (CP), which is the one for LPG supply in West Asia.

However, state-owned oil companies are now insisting on including the US standard price and the logistics costs involved in transatlantic shipments. US LPG is cost-effective for India only if the price discount compared to Saudi CP is high enough to cover logistics costs, which are roughly four times higher than shipments from Saudi Arabia.

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Last month, Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited signed a one-year agreement to import approximately 2.2 million metric tonnes per annum of LPG from the US for the contract year of 2026. This is approximately 10% of India’s annual LPG imports. The government controls the price of LPG sold to households by state-owned companies. Government compensates companies when they incur losses by selling below market price.

The logistics cost of LPG imported from the US will be four times higher than that of LPG imported from Saudi Arabia. If the Government of India is to supply gas cylinders to the general public at the present subsidy, it is very important to get an exemption on the American supply. If this does not happen, the government may reduce the subsidy to the general public in the coming years. This means that LPG cylinders may become expensive for the general public and lakhs of consumers covered under the Ujjwala scheme.

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In the national capital, Delhi, the current price of a subsidized domestic gas cylinder is Rs 853, while that of a commercial gas cylinder is Rs 1,580.50. The last change in domestic gas cylinder price was on 8th April 2025. At that time, the government had increased the price of domestic gas cylinders by Rs.

On the other hand, currently under the Ujjwala scheme, users are given a subsidy of Rs.300. As of December 1, 2025, the number of Ujjwala Yojana beneficiaries in the country is 103.5 million. During the current financial year, 25 lakh beneficiaries have been added under this scheme. The total number of LPG users in the country is approximately 330 million.