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New Delhi: As global energy prices surge on account of the continuing conflict in West Asia, state-run Oil Marketing Companies (OMCs) have increased the prices of commercial Liquefied Petroleum Gas (LPG) cylinders by Rs 195.50 per 19-kg cylinder, while keeping domestic cooking gas cylinder prices unchanged. With the latest price revisions in place, a 19-kg commercial LPG cylinder now costs Rs 2,078.50 in Delhi, Rs 2,208 in Kolkata, Rs 2,031 in Mumbai and Rs 2,246.50 in Chennai.
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The prices of household 14.2-kg LPG cylinder continues to be unchanged at Rs 913 in Delhi, Rs 939 in Kolkata, Rs 912.50 in Mumbai and Rs 928.50 in Chennai.
Referring to a rise of around 44 percent in Saudi-CP benchmark in a month’s time, a government official said that since OMCs continue to incur under-recovery on LPG and other fuels, it was decided to pass on some of the increase in procurement prices to the cost of deregulated products, like commercial LPG.
“Our import dependency (in LPG) is about 60 percent. In comparison to the last month, this month, the Saudi-CP benchmark has seen a significant jump from USD 522 to USD 780, which makes for a 44 percent increase. Despite the increase, there has been no increase in the prices of LPG cylinders for domestic consumers. Because of this increase in Saudi-CP benchmark, our oil marketing companies will be incurring under-recovery on LPG,” said Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas, at an inter-ministerial press briefing on Wednesday.
Explaining the rationale behind the decision, the Petroleum Ministry said in a post on X, “April 1 price increase in Commercial cylinder price is due to a 44 percent surge in the Saudi Contract Price: from $542/MT in March to $780/MT for April, as 20-30 percent of global LPG supplies are stuck in Strait of Hormuz.”
“At current prices, OMCs are incurring under recovery of Rs 380/cylinder. Cumulative losses by end-May will reach approximately Rs 40,484 crore. Last year also, out of total losses of Rs 60,000 crore, Rs 30,000 crore were absorbed by Oil PSUs and Rs 30,000 crore by Government of India, in order to insulate the Indian citizen from high international LPG prices,” said the Petroleum Ministry on X.
“India’s domestic LPG price remains one of the the lowest in the world as compared to Pakistan: Rs 1,046. Sri Lanka: Rs 1,242. Nepal: Rs 1,208,” the ministry added.
Around 55,622 MT of commercial LPG has been uplifted by states since March 14, according to official estimates. The government has currently ramped up supplies of LPG to commercial consumers to about 70 percent of pre-crisis levels, the Petroleum Ministry has said. The ministry also said that commercial LPG users make up just about 10 percent of India’s total LPG consumers.
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With the West Asia conflict effectively closing off the critical maritime route for energy supplies — Strait of Hormuz — global energy prices have gone up significantly. India, which depends on imports to meet most of its oil and gas consumption, is undertaking a tough balancing act as fuel prices are linked to global price benchmarks. OMCs are bleeding cash as they continue to hold the prices of petrol, diesel and LPG steady through the volatility in the global energy markets. They have been incurring under-recovery of Rs 380/cylinder on LPG, Rs 24.40/litre on petrol and Rs 104.99/litre on diesel. In terms of ensuring supplies, India is in a more comfortable position with respect to the availability of crude oil and refined petroleum products like petrol and diesel, but it is still bearing the brunt of high energy prices.
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