Domestic LPG buyers getting Rs 700-Rs 1000 subsidy per cylinder, under recovery of about Rs 700: Petroleum Ministry
New Delhi, June 8
The government has stressed that LPG consumers continue to get a large indirect subsidy even after the Rs 29 per cylinder price increase, with the subsidy amounting to about Rs 700 for non-Ujjwala users and Rs 1,000 for Ujjwala beneficiaries.
Additional Secretary, Ministry of Petroleum and Natural Gas, Praveen Mal Khanooja, said on Monday that the effective cost of a 14.2 kg cylinder based on Saudi CP is over Rs 1,600, but consumers pay Rs 942.
"Whether I'm a Ujjwala customer or a non-Ujjwala customer, I'm getting cylinder which should have costed Rs 1,600, at Rs 942, even if I'm a non-Ujjwala customer. Now in that case, that is also an indirect subsidy to the customer. Now over and above that, Ujjwala customers get Rs 300 more. So overall, if you see, they are getting Rs 1,000. The non-Ujjwala are also getting Rs 700 a cylinder," Khanooja said during the inter-ministerial press briefing.
He added that OMC under-recovery is currently about Rs 700 per 14.2 kg cylinder, similar to levels seen earlier, when the government compensated OMCs with Rs 52,000 crore across FY23 and FY24.
On supply, Khanooja said crude oil, LPG and natural gas supplies remain stable despite the situation in West Asia.
Domestic LPG production has been "maximised" and hit 53 TMT per day on World LPG Day, about 60 per cent higher than pre-crisis levels. Backlogs at distributorships are now under four days, online sender bookings are 99 per cent and delivery authentication is 96 per cent. In the last four days, sender bookings averaged 42 lakh per day while deliveries were 44 lakh per day. Commercial LPG sales have also recovered to 6 TMT per month, or 70-75 per cent of pre-crisis consumption.
For Ujjwala customers, the subsidy is capped at Rs 300 per cylinder for the first four cylinders annually, reflecting average consumption of 4-5 cylinders per year. The Rs 29 hike, Khanooja said, works out to Rs 1 per day and "20 paisa per day per household member" for a family using 12 cylinders a year, calling it a "very minor hike" compared to the Rs 700 under-recovery.
The briefing also covered other fuels. Refineries are running at optimum levels and have supplied 2,760 MT of C3/C4 molecules and 1,660 MT of butyl electrolyte since June 1 for chemicals and pharma. PNG connections crossed 1.69 crore with 9.16 lakh new connections since March 2026. E85 flex-fuel, launched on June 5 for specially designed vehicles, is available at 50 pumps now and is expected at 5,000 pumps by December 2027, priced Rs 20/litre below E20. Enforcement drives saw 1,800 raids on petrol/diesel outlets and 890 LPG distributor inspections in four days, with FIRs and penalties imposed.
On petrol and diesel, Khanooja said OMCs face under-recoveries of Rs 30/litre on diesel and Rs 6/litre on petrol, translating to daily losses of Rs 600-700 crore for the industry.
— ANI
Reader Comments
Finally some clarity! I was wondering why LPG prices are still high despite global crude falling. So OMCs are losing Rs 700 per cylinder? That's a lot. But wait, if the under-recovery is Rs 700, and they hiked by Rs 29, that's still a gap. The real issue is that we are subsidising global prices. Saudi CP hasn't come down much. The government should focus on boosting domestic production, which they say is up 60%—good news actually. Let's hope this stabilises prices soon. 🙏
Honest question: If non-Ujjwala customers are getting Rs 700 subsidy per cylinder, why aren't they shouting about it? Because we only see the hike! The ministry says effective cost is Rs 1,600 but we pay Rs 942—that's a massive saving. But then they say OMCs are losing Rs 700, so it's a circular thing. The real problem is that India imports most of its LPG. We need more self-reliance. Also, the Rs 20/litre gap for E85 flex-fuel is interesting—let's see how that develops.
I'm a Ujjwala beneficiary and I'm grateful for the Rs 300 extra subsidy. But 4 cylinders per year cap? Many families need more than that. My mother-in-law uses about 6 cylinders a year. After the 4th cylinder, we pay full price? That's tough. The Rs 29 hike may seem small to officials, but for us it's a significant amount. Still, I appreciate the government helping the poor. Wish they'd extend the subsidy cap or at least increase the number of subsidised cylinders.
This is classic government spin. "You're getting Rs 700-1000 subsidy" sounds great, but it's because global prices are high,
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