Friday, 12 Sep, 2025
The sharp increase in prices is bound to compound misery of households grappling with runaway inflation and rising prices of various commodities
Cooking gas, Liquefied Petroleum Gas (LPG), price on Wednesday was hiked by Rs 50 per cylinder. Non-subsidized will now LPG now Rs 1,053 per 14.2-kg cylinder in the national capital, up from Rs 1,003 previously. This is the third increase in rates since May on firming international energy prices. On May 7, the LPG cylinder became costlier by Rs 50. Further, on March 22 also, there was a hike of Rs 50 in the price of the cylinder. Prices have gone up by Rs 244 per cylinder since June 2021. Of this, Rs 153.50 increase happened since March 2022.
The sharp increase in prices is bound to compound misery of households grappling with runaway inflation and rising prices of various commodities.
What influences LPG prices in India?
India’s LPG prices are benchmarked to international prices of petroleum gas. Saudi Arabia’s national oil company, Saudi Aramco acts as the benchmark. It has set the price for LPG in March to $769.1 per metric tonne (MT), up 5.9 per cent from $726.4 per MT in January, and up over 104 per cent from the November 2020. The price of India’s crude oil basket has risen from $41 per barrel in November 2020 to $115.4 as on March 23, 2022.
Food and fuel costs have also been soaring since the Russia-Ukraine war crisis in February (Russia accounts for over 24 per cent of the natural gas supply in the world). The fall of rupee has also fueled the crisis. This dollar-denominated figure is converted into rupees before local costs are added. The dollar-rupee dance has was within the range of ₹71-₹72 last year, has already breached the ₹78 mark.
How it affects you
Cylinder prices have long been a hotly-debated political issue in India. But the issue has become even more sensitive after the Covid pandemic, which suppressed incomes, caused job losses and exhausted savings. The increased cylinder prices is going to pinch the consumers more.
According to a report by Council on Energy, Environment and Water (CEEW), a policy think-tank, an average Indian household had to set aside 4.9% of its monthly expenditure on procuring cooking fuel in March 2020. Two years later, it has increased to 11%.
High cylinder prices is also reversing the gains made by PM Narendra Modi's pet scheme - Pradhan Mantri Ujjwala Yojana. Launched in 2016, it provided subsidized LPG connections and cylinders to more than more than 80 million beneficiaries. CEEW figures states that LPG's share in Indians' primary cooking fuels had increased from 28.5% in 2011 to 71% by March 2020.
However, recurring expense of refilling cylinders is forcing marginalised household to look for alternatives. In reply to a Right to Information (RTI) application filed by activist Chandrashekhar Gaur to the three oil marketing firms Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL), more than 90 lakh beneficiaries of Ujjwala scheme in the country had not refilled their cylinder even once during 2021-2022. 1.08 crore people have only managed to refill it just once in the entire year.
As per a reply filed by the government in Lok Sabha, in March this year, the LPG consumption under the Ujjwala Yojana remains 3.66 refills per connection annually.
Increase in LPG prices also spurs inflation. As it is, the consumer price index inflation has seen a rise over the past few months. The inflation rate has already breached RBI’s comfort zone of 2-6 per cent. On the other hand, retail inflation has galloped to a 95-month high in April at 7.8 percent.
