LPG price hiked by Rs 60; govt says impact just 20 paise/person/day, no petrol or diesel hike

New Delhi, Mar 7 (PTI) Domestic cooking gas LPG price was hiked on Saturday by a steep Rs 60 per cylinder, the second increase in rate in less than a year, as the spike in global energy rates following the West Asia crisis weighed on the world's third largest energy consumer.

Top government sources, however, were quick to state that an increase in petrol and diesel prices is not in the offing as state-owned oil firms have enough financial muscle to absorb the warranted increase.

Non-subsidised LPG -- the one that common households use in kitchens -- will now cost Rs 913 per 14.2-kg cylinder in Delhi as against Rs 853 previously, according to the Indian Oil Corporation (IOC) website.

Ujjwala Yojana beneficiaries -- the over 10 crore poor who have got free LPG connections since 2016 -- will also have to bear the same amount of price increase. They will now pay Rs 613 per 14.2 kg cylinder after accounting for a subsidy of Rs 300 per bottle they get for up to 12 refills in a year.

Top government sources said the increase was necessitated because of a spike in global energy prices. Despite the increase, the price is less than the Rs 1,050 per 14.2-kg cylinder rate required to breakeven at cost.

They said considering an average consumption of 4-5 cylinders per year per household, the increase translates to 80 paisa per day for a family of four or just 20 paisa per person.

Even at the increased prices, LPG in India is cheaper than most countries in the world, they said adding cooking costs Rs 1,207 per bottle in Katmandhu, Rs 1,241 in Sri Lanka and Rs 1,046 in Pakistan.

Sources ruled out any immediate increase in petrol and diesel price as three fuel marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) with bumper profits in earlier this year - had enough financial muscle to absorb such impact.

Retail petrol and diesel prices have been on a freeze since April 2022, with fuel retailers absorbing losses when crude prices are high and making profits when rates are low.

The LPG price rise of Saturday is the second increase in rate in 11 months. The price was last hiked by Rs 50 in April last year.

Alongside, the price of commercial LPG - the one used by establishments such as hotels and restaurants - was increased by Rs 114.5 per 19-kg cylinder. It now costs Rs 1,883 in Delhi. This increase comes on top of Rs 28 per 19-kg cylinder raise effected on March 1.

Commercial LPG rate has risen by Rs 302.50 this year.

Officials said the increase follows a steep rise in global energy prices since the US and Israel attack on Iran last weekend triggered a wider military conflict in the oil and gas-rich Middle East.

The conflict has led to a near halt in tanker movement through the Strait of Hormuz -- the narrow but critical sea lane between Iran and Oman used by Middle Eastern producers to export oil and gas to global markets. The disruption has sharply curtailed energy shipments from the region, triggering a spike in global oil and gas prices.

Since the conflict broke out on February 28, the US crude soared 35.63 per cent for the biggest weekly gain in the history of futures contract dating back to 1983. West Texas Intermediate (WTI) futures closed at USD 90.90 per barrel. Brent jumped about 28 per cent for its biggest weekly gain since April 2020, to settle at USD 92.69 per barrel.

Asian spot prices for liquefied natural gas (LNG) have also jumped to about USD 25.40 per million British thermal units (MMBtu) -- a three-year high and more than double of last week's levels of around USD 10 per mmBtu amid fears of supply disruptions and halted exports from Qatar.

LPG markets have also tightened as shipments from key Gulf exporters face logistical disruptions, pushing international propane and butane benchmarks higher and raising concerns over supply availability for major importers such as India.

In Mumbai, non-subsidised LPG now costs Rs 912.50, Rs 939 in Kolkata, and Rs 928.50 in Chennai, according to the IOC website.

Rates differ from state to state depending on the incidence of local sales tax or VAT.

The Strait of Hormuz is also a critical conduit for India's energy imports, with roughly half of the crude oil the country buys from overseas transiting through the narrow waterway. In addition, nearly 40 per cent of India's natural gas imports, largely in the form of LNG from Gulf suppliers like Qatar and the UAE, also pass through the strait.

For LPG, the strait is more important. India consumed 31.3 million tonne of LPG in 2024-25, of which only 12.8 million tonne were produced domestically, with the remainder imported. Of the imported quantity, 85-90 per cent come from countries like Saudi Arabia that rely on the Strait of Hormuz for transit.

The Strait has been effectively blocked following a week-old escalation in the region, after US and Israeli strikes on Iran prompted Tehran to retaliate against US bases in neighbouring countries.

To augment domestic supplies, the government on Friday invoked sparingly used emergency powers to direct oil refineries to ramp up LPG production. PTI ANZ TRB