State-owned oil marketing companies increased domestic LPG prices by ₹29 per cylinder on Saturday, marking the second hike in the past three months. However, cooking gas prices in India remain significantly lower than those in neighbouring countries and several advanced economies.

The government noted on Sunday that petroleum product prices in India are linked to corresponding prices in the international market.

A beneficiary of the Pradhan Mantri Ujjwala Yojana (PMUY) currently pays an effective ₹642 for a 14.2-kg LPG cylinder, while a general consumer in Delhi pays ₹942, against a supply cost that has now risen to over ₹1,600, it said.

PMUY beneficiaries receive a direct benefit transfer of ₹300 per cylinder on the first four refills each year. Even non-PMUY households pay about ₹700 less than the market-linked cost of a cylinder.

"What the household does not bear the brunt of is the several hundred rupees a cylinder which the government is bearing. Through a period of sharp international cost increases, that burden has been absorbed upstream rather than passed to the consumer," the Ministry of Petroleum and Natural Gas said in a statement.

The latest increase comes after a ₹60-per-cylinder hike on March 7 amid disruptions in global energy supplies caused by the West Asia conflict that drove up international fuel prices. Industry sources said that the March increase had only partially offset the losses incurred on domestic LPG sales. According to a PTI report, state-run oil marketing companies were estimated to be losing around ₹703 on every LPG cylinder sold prior to the latest revision.

Among other countries, the price of a 14.2-kg LPG cylinder works out to ₹1,046 in Pakistan, ₹1,207 in Nepal, around ₹1,225 in Bangladesh, ₹1,241 in Sri Lanka, approximately ₹1,755 in the United States, about ₹1,765 in Australia and nearly ₹2,411 in Canada.

The ministry noted that the price of commercial LPG cylinders used by hotels and businesses is revised automatically every month, as it directly reflects international benchmark prices. India imports nearly 60 per cent of its LPG requirements, and the landed cost of these imports is linked to the Saudi Contract Price (CP), which is set by Saudi Aramco at the beginning of every month. 

According to the government, this is an external benchmark over which Indian consumers have no control.

The ministry further pointed out that, following the June contract price revision, the cost of supplying a 14.2-kg domestic LPG cylinder on an import-linked basis has risen to more than ₹1,600. The under-recovery absorbed on each domestic cylinder is now estimated at around ₹700.

“The scale of this is visible in the fully market-priced commercial cylinder: the 19 kg cylinder used by hotels and restaurants sells in Delhi at ₹3,113.50, about ₹164 a kg, after five increases during the West Asia crisis,” it said, adding that the domestic household, however, pays about ₹66 a kg after the revision.

Highlighting disruptions in the Strait of Hormuz following the US-Iran war, the ministry said that around 54 per cent of India’s LPG consumption is routed through the strategic waterway, leaving cooking gas supplies directly exposed to any disruption.

“India was among the few that kept its energy cargoes moving. Through sustained coordination, Indian-flagged tankers continued to transit the Strait and discharge at Indian ports, carrying crude oil and successive consignments of LPG. There has been no shortage of any petroleum product, and bottling and distribution have continued normally across the network,”it said.

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