New Delhi: The cost of supplying a domestic LPG cylinder has risen sharply due to the ongoing crisis in West Asia, prompting the government to absorb a significant portion of the burden to protect consumers.
According to the Petroleum Ministry, the import-linked cost of a 14.2-kg domestic LPG cylinder has now crossed Rs 1,600. Despite this, households are paying only around Rs 942 per cylinder after the latest Rs 29 price hike.
Loss of Around Rs 700 per Cylinder
The gap between the actual supply cost and the selling price means oil marketing companies are absorbing an under-recovery of about Rs 700 on every domestic LPG cylinder.
The government said this support is aimed at shielding households from the full impact of rising global energy prices.
West Asia Crisis Hits Energy Supplies
The rise in LPG costs is linked to disruptions caused by tensions around the Strait of Hormuz, a key global energy shipping route.
Nearly one-fifth of the world's oil trade passes through the Strait. Around 54 per cent of India's LPG imports are also routed through this channel, making the country vulnerable to supply disruptions.
No LPG Shortage in India
Despite the challenges, the government said there has been no shortage of LPG, petrol or diesel anywhere in the country.
Indian-flagged tankers continued transporting crude oil and LPG cargoes to Indian ports, ensuring regular supply and distribution across the nation.
Steps Taken to Boost Supply
To reduce dependence on imports, domestic LPG production was increased by more than 60 per cent, rising from about 32 thousand metric tonnes to 52 thousand metric tonnes.
India also expanded sourcing from countries such as United States, Canada and Algeria.
Consumers were encouraged to switch to PNG where available, while stricter OTP-based delivery verification helped curb diversion of subsidised LPG.
Subsidy Support Continues
The cumulative under-recovery on domestic LPG reached Rs 60,000 crore by the end of the last financial year. To support oil companies, the Union Cabinet approved compensation of Rs 30,000 crore.
In addition, beneficiaries of the Pradhan Mantri Ujjwala Yojana continue to receive a subsidy of Rs 300 per cylinder directly in their bank accounts.
