Govt Says LPG Prices Still Below Market Level; No Hike In Petrol, Diesel

The government has reiterated that domestic liquefied petroleum gas (LPG) prices in India remain below market-linked levels despite a recent increase in cylinder rates. Officials also said there are no plans to raise petrol or diesel prices at present, even as global energy markets remain volatile.

The clarification comes after a ₹60 revision in the price of a 14.2-kg LPG cylinder. Government sources said the adjustment was smaller than what pricing formulas would normally justify, adding that a larger increase had been avoided to shield consumers.

Officials also indicated that India’s energy supply position has improved in recent weeks, easing concerns about fuel availability despite tensions in West Asia.

Why Does the Government Say LPG Prices Are Still Below Market Rates?

Government officials said the price revision does not fully reflect global LPG costs.

Internal pricing projections indicate that in March 2026, the market-linked cost of a typical 14.2-kg LPG cylinder in Delhi was around ₹987. There was a difference of around ₹134 per cylinder, though, as the retail selling price stayed lower at ₹853.

Officials said the pricing calculations suggested that a full increase could have matched the difference. Instead, the government approved only a ₹60 revision, with the remaining amount effectively absorbed in order to reduce the burden on households.

The government also pointed out that cooking gas prices in India remain lower than those in several neighbouring countries. Recent comparisons showed the same cylinder costing more in Pakistan, Sri Lanka and Nepal.

For beneficiaries of the Pradhan Mantri Ujwala Yojana (PMUY), the subsidy continues unchanged. With government support of ₹300 per cylinder, the effective price for ujwala users now stands at ₹560.

Over the past few years, global LPG prices have fluctuated sharply. Despite this volatility, authorities said only a limited portion of the increase has been passed on to consumers.

Will Petrol And Diesel Prices Increase?

The government has ruled out any immediate increase in petrol and diesel prices.

Officials said retail fuel prices remain stable and reiterated that the administration has already cut central excise duties on petrol and diesel on three separate occasions in recent years.

The reassurance comes as global crude markets react to geopolitical tensions in West Asia, which have raised concerns about potential supply disruptions.

Authorities said India’s energy supply position has improved in recent weeks. Internal reviews have indicated stronger stock availability, which has helped ease earlier concerns.

Government sources also pointed out that India has diversified its crude procurement strategy to reduce dependence on vulnerable shipping routes.

At present, around 70% of India’s crude imports are sourced from regions outside the Strait of Hormuz, a key global oil transit corridor that has been under scrutiny amid regional tensions.

Officials also said remarks from Iran’s leadership suggesting that the Strait may remain open to many global buyers have helped calm immediate supply fears.

As a result, policymakers believe the risk of sudden disruptions to India’s fuel supply remains manageable for now.

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What Does This Mean For Energy Companies And Markets?

The government’s stance on fuel pricing could have implications for oil and gas companies operating in India.

Oil marketing companies (OMCs) such as Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), and Indian Oil Corporation Ltd (IOCL) remain in focus because they handle the retail distribution of petrol, diesel and LPG.

These companies have previously absorbed ₹18,622 crore in losses in 9 months of FY23 when global energy prices rose sharply while domestic retail prices remained controlled.

State-run upstream organisations like Oil and Natural Gas Corporation (ONGC) and Oil India Ltd may also receive attention as oil prices fluctuate due to geopolitical events. Given the importance of LNG imports in India’s energy mix, gas infrastructure players such as GAIL (India) Ltd may also remain in focus.

Even with volatility in global energy markets, officials said the government’s current approach seeks to balance consumer protection with the financial health of oil marketing companies. In the coming weeks, investors and consumers can watch global crude prices, LPG benchmarks, and developments in the West Asia region that could affect supply routes.

Sources:

Moneycontrol

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ANI News