Indian households will face another increase in cooking gas expenses as state-owned oil marketing companies (OMCs) have raised the price of domestic LPG cylinders by Rs 29. The current revision, which took effect on 7th June, has been driven by continued pressure from high global energy prices as well as high costs for fuel procurement.

Key Highlights

• Domestic LPG cylinder prices increased by Rs 29 amid elevated global energy and fuel costs.
• Patna records highest LPG rate while oil firms continue facing significant under-recoveries.

Price of Domestic LPG Increased Across all the Major Cities

Since the last revision, the domestic LPG price has increased for consumers in a few major cities. The price of a 14.2-kg LPG cylinder stands at Rs 942 in Delhi,  Rs 968 in Kolkata, Rs 941.50 in Mumbai, Rs 944.50 in Bengaluru, and Rs 957.50 in Chennai.

In key cities, Patna is still the most expensive domestic LPG price at Rs 1,031.50 per cylinder, Lucknow residents will now have to pay Rs 979.50 per cylinder while the Ahmedabad consumers will have to pay Rs 949 per cylinder of LPG.

Commercial LPG Rates Continue to be High

The cost of a 19-kg commercial LPG cylinder is Rs 3,113.50 in Delhi, Rs 3,255.50 in Kolkata, Rs 3,067.50 in Mumbai, and Rs 3,198 in Bengaluru. In Patna, the commercial user is paying up to Rs 3400 per cylinder.

Small businesses, restaurants and hotels that relies on commercial LPG will still be subject to higher operating expenses because of the high volatility in energy prices.

Also Read: Commercial LPG Prices Hit Record Highs After Fresh June Hike

Oil Marketing Companies Still Facing Losses

Despite all the price adjustments, industry estimates show that stateowned fuel retailers were still making significant under-recoveries on domestic LPG sales.

As per reports, oil marketing companies were incurring a loss of approx Rs 703 per subsidised domestic LPG cylinder before the latest hike. This Rs 29 increase should cover some of these losses, but industry sources indicate that there is a big difference between the cost at which the goods are bought and the price the retailers sell for.

Fuel Price Pressures Remain Broad Based

The increase in LPG price coincides with the rising price of fuels in all categories for consumers. Petrol and diesel prices have risen a total of Rs 7.50 per litre since the mid of May, while the price of compressed natural gas (CNG) has risen by almost Rs 6 per kg.

The estimates from industry sources indicate that petrol and diesel are still being sold at a loss to the retailers, at around Rs 11 per litre for petrol and Rs 33.6 per litre for diesel.

Domestic Price Revisions Driven by Global Gnergy Markets

The analysts say the recent LPG price jump is due to continued energy market volatility. The geopolitical tensions and supply disruptions have maintained the crude oil, natural gas, fuel prices well high, resulting in higher import and procurement prices for Indian fuel retailers.

The government has so far taken a slice of the burden through the state-owned oil companies rather than imposing the whole burden on consumers. But the whole world's price pressures go on affecting decisions on domestic fuel prices.

The revised LPG underscores the issues of affordability of fuel, escalating international fuel prices and financial position of oil marketing businesses in India.