Domestic LPG cylinders carry implicit subsidy of over Rs 700: Govt

The government said domestic LPG cylinders had an implicit subsidy of over Rs 700 in June 2026 amid rising global prices due to the West Asia crisis. The retail price was kept at Rs 942, while PMUY users paid Rs 642, the minister stated.

The government on Thursday said domestic LPG cylinders carried an implicit subsidy of more than Rs 700 per 14.2 kg cylinder in June this year despite a sharp rise in international LPG prices triggered by the West Asia crisis, helping keep retail prices affordable for consumers.

Subsidy and Price Breakdown

In a written reply to a question in the Lok Sabha, Minister of State for Petroleum and Natural Gas Suresh Gopi said, "The Retail Selling Price of domestic LPG is being maintained at Rs. 942 per 14.2 Kg cylinder, carrying an implicit subsidy (under-recovery) of more than Rs 700 per 14.2 Kg cylinder, in June 2026. Even for the month of July 2026, the implicit subsidy on each 14.2 Kg domestic LPG cylinder is more than Rs 500 per cylinder."

The ministry said global LPG prices surged after the outbreak of the West Asia conflict, with the average Saudi Contract Price (Saudi CP), the international benchmark for LPG pricing, rising to USD 780 per metric tonne in April and May 2026 and further to USD 796 per metric tonne in June. It said that at these international prices, the market-determined price of a 14.2 kg domestic LPG cylinder would have reached Rs 1,695 in June.

"For more than 10.5 crore PMUY consumers, the effective price is only Rs. 642 per cylinder (Delhi), after a targeted subsidy of Rs. 300 per cylinder, in addition to the implicit subsidy of more than Rs 500 per cylinder," the minister said.

Managing Supply Amid Global Disruptions

The government also highlighted the steps taken to maintain uninterrupted LPG supplies despite disruptions caused by the closure of the Strait of Hormuz. According to the reply, India earlier imported around 60 per cent of its LPG requirement, with nearly 90 per cent of those imports transiting through the Strait of Hormuz.

The government said it responded by increasing domestic LPG production from 34 TMT per day to 54 TMT per day, diversifying import sources, prioritising household consumption, dynamically managing stocks and reallocating supplies across regions.

"Despite this unprecedented crisis, supply of LPG to all households in the country has been ensured without any disruption. During the peak of this crisis, more than 56 crore domestic LPG cylinders were delivered between March and June 2026, including more than 12 crore cylinders to Ujjwala families," the reply said.

Financial Aid to Oil Companies

The government further said it paid Rs 22,000 crore to oil marketing companies (OMCs) in FY2022-23 and is paying Rs 30,000 crore during FY2025-26 and FY2026-27 to keep domestic LPG affordable. However, it added that "accumulated under-recovery of the PSU OMCs on domestic LPG was more than Rs 51,000 crores as of 30th June 2026 itself." (ANI)

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