Indian households have lowest LPG rates despite 46% jump in global prices; here's why

Households in the country continue to pay among the world's lowest LPG rates despite a sharp rise in global energy costs, with domestic cylinder prices remaining lower than in several neighbouring countries and even many developed economies, the Petroleum and Natural Gas Ministry said on Sunday. Noting that a 14.2 kg LPG cylinder in the national capital now costs Rs 942 for general consumers, the ministry said that beneficiaries of Pradhan Mantri Ujjwala scheme (PMUY) -- a flagship social welfare scheme that provides deposit-free cooking gas connections to adult women from poor households -- effectively pay Rs 642 after a Rs 300 subsidy on the first four refills each year.

Here are 10 things to know about the LPG refill prices versus international benchmarks:

• Currently, the government estimates that PMUY households get LPG refills at about a 60 per cent discount to international prices, while non-PMUY consumers receive an effective discount of about 45 per cent compared with market-linked costs. This is because India has maintained LPG and petroleum supplies without shortages by boosting domestic production, diversifying imports and keeping cargoes moving despite disruptions in the Strait of Hormuz -- a key route for the country's energy imports that normally enables the supply of one-fifth of the world's oil and gas.
• The cost of supplying a cylinder has risen to over ₹1,600, an under-recovery of about Rs 700 on each domestic cylinder, against a Saudi CP for LPG that has risen by about 46% since February.
• The ministry said that oil marketing companies (OMCs) are currently facing an under-recovery of Rs 700 per cylinder because the actual cost of supplying a cylinder has risen to over Rs 1,600 due to a roughly 46 per cent jump in international LPG benchmark prices since February 2026. It also noted that the Centre and PSU OMCs are absorbing much of this cost burden, with cumulative LPG under-recoveries reaching around Rs 60,000 crore in the last financial year.
• The ministry highlighted that the LPG cylinder in India is cheaper than in any neighbouring country and far below the price in advanced economies such as the US, Australia and Canada. Ujjwala households will receive Rs 300 per cylinder on the first four refills each year -- Rs 1,200 per beneficiary a year; and even a non-PMUY household will still be paying about Rs 700 below the market cost of LPG.

• It noted that between February and June so far, the Saudi CP LPG benchmark has risen by about 46 per cent as disruption in the Strait of Hormuz has tightened Gulf supply, taking the cost of supplying a 14.2 kg cylinder to over Rs 1,600. The gap between the international cost and the regulated retail price -- an estimated amount rising towards Rs 60,000 crore on domestic LPG in the last full year -- has widened from Rs 41,338 crore the year before and is borne by the PSU OMCs and the exchequer, against which the Cabinet has approved Rs 30,000 crore in compensation.
• It said that over and above this, Ujjwala consumers receive an additional Rs 300 per cylinder credited directly to their bank account, reaching more than 10.58 crore connections. Almost all Indian consumers have received LPG at prices far below international market levels through the last several years, and Indian households continue to pay less than households in Pakistan, Nepal, Bangladesh and Sri Lanka, and far less than in the United States, Australia and Canada even now.
• It also pointed out that the effective Ujjwala price of the first four cylinders, at Rs 642, is at a discount of about 60 per cent to the actual international price of an LPG cylinder. .
• Consumers are urged to take utmost care in using this precious resource and adopt energy efficient cooking practices. The LPG refill in the country is cheaper than in any neighbouring country and far below the price in advanced economies such as the United States, Australia and Canada, it said.
• It reiterated that there is no shortage of any petroleum product in the country, with India being among the few countries to keep its energy cargoes moving through the Strait of Hormuz. The prices of petroleum products in India are linked to the corresponding prices in the international market, it noted.
• The under-recovery now absorbed on each domestic cylinder is about Rs 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 Rs 3,113.50, about Rs 164 a kg, after five increases during the West Asia crisis. The domestic household, by contrast, pays about Rs 66 a kg after the revision. At the same time, rates of commercial LPG cylinders -- used by hotels and businesses -- are revised automatically every month, because its price is a direct pass-through of the international benchmark. Commercial gas carries a higher rate of tax and larger margins, so it sits above the household’s cost-reflective level; even so, the import-linked cost of a domestic cylinder works out to over Rs 1,600.