Commercial LPG Price Hike Linked to Global Markets: No Change in Domestic LPG Prices

The government has recently stated that ₹111 increase in commercial LPG cylinder prices needs to be viewed in the proper context. The PIB note stated that the prices of commercial LPG cylinders are market-determined and aligned with international benchmarks. 

As a result, any revision in commercial LPG prices reflects movements in global LPG prices and related cost factors. It is important to note that there has been no change in the prices of domestic LPG cylinders.

India’s LPG Pricing Linked to Imports and Saudi CP

India imports nearly 60% of its LPG requirements, making domestic pricing closely linked to international trends, with Saudi Contract Price (CP) serving as the key global benchmark. Between July 2023 and November 2025, the average Saudi CP increased by about 21%, rising from US$385 per metric tonne to US$466 per metric tonne. Despite this global increase, the price of domestic LPG was reduced by around 22% during the same period, falling from ₹1,103 in August 2023 to ₹853 in November 2025.

Domestic Consumers Protected from Global Price Volatility

To protect household consumers, the effective price of a 14.2 kg domestic LPG cylinder, whose market cost is around ₹950, is available at ₹853 for non-PMUY consumers in Delhi and at ₹553 for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries. 

This represents a reduction of nearly 39% in the effective price for PMUY consumers, from ₹903 in August 2023 to ₹553 in November 2025. There has been no revision in these prices.

Continued Subsidy Support for PMUY Consumers

For FY 2025–26, the Government has approved the continuation of a targeted subsidy of ₹300 per 14.2 kg cylinder for up to nine refills annually for PMUY beneficiaries. The approved expenditure for this initiative stands at ₹12,000 crore, reinforcing the Government’s commitment to ensuring affordable access to clean cooking fuel for vulnerable households.

Government Support to Offset OMC Losses

Although international LPG prices rose during 2024–25 and remain elevated, the increase was not passed on to domestic consumers. This decision resulted in losses of approximately ₹40,000 crore for Oil Marketing Companies (OMCs). To ensure an uninterrupted supply of domestic LPG at affordable prices, the Government has recently approved compensation of ₹30,000 crore to the OMCs.

Relief on CNG and PNG Prices From January

Consumers in the clean fuel segment have also received positive news at the start of the New Year. With effect from January 1, prices of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) have been reduced in select cities. This includes lower PNG prices in parts of the Delhi-NCR region and a ₹1 reduction each in CNG and domestic PNG prices announced by city gas distribution companies. These reductions follow recent revisions in pipeline tariffs and are expected to benefit households and vehicle users while encouraging cleaner fuel adoption.

Limited Impact of Commercial LPG Price Changes

Commercial LPG users account for a significantly smaller base, around 30 lakh consumers (limited to public sector company users), compared to more than 33 crore domestic LPG consumers nationwide. 

Commercial LPG is primarily used by hotels, restaurants, and large establishments, whereas domestic LPG serves household cooking needs. The unchanged domestic LPG pricing highlights the Government’s continued focus on protecting household consumers.

Also Read: Government Mandates Star Labelling for Refrigerators, Televisions and Other Appliances from January 1, 2026 

Conclusion

While the commercial LPG prices continue to reflect international market movements, the Government has consistently taken targeted steps to insulate domestic consumers from global price fluctuations. These measures aim to maintain affordability, ensure energy security, and promote the sustained use of clean cooking and transport fuels across the country.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.