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NEW DELHI — Energy markets worldwide are reeling from intense geopolitical supply shocks, but Indian households are largely being shielded from the financial heat. Despite international supply costs skyrocketing due to maritime supply chain disruptions in West Asia, domestic LPG (cooking gas) prices in India remain among the lowest in the world.
According to data released by the Ministry of Petroleum & Natural Gas, the actual cost to import and supply a standard 14.2 kg domestic cylinder has climbed to over ₹1,600. However, thanks to heavy government intervention, general consumers in Delhi are paying ₹942, while beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) receive an effective rate of just ₹642 for their first four refills of the year.
By freezing retail prices and absorbing an under-recovery of roughly ₹700 per cylinder upstream, the government has essentially given domestic users a 45% to 60% discount compared to actual market rates.
Global Reality Check: How India Compares
When stacked up against neighboring countries and advanced Western economies, the impact of India’s price-modulation strategy becomes starkly visible. Below is how global cooking gas retail rates look compared to India’s domestic pricing:
| Market | Price per 14.2 kg cylinder (₹) | Ujjwala consumer pays less by |
|---|---|---|
| India (Ujjwala, effective after revision) | 642 |
— |
| Pakistan | 1,046 |
about 39% |
| Nepal | 1,207 |
about 47% |
| Bangladesh | approx. 1,225 |
about 48% |
| Sri Lanka | 1,241 |
about 48% |
| United States | approx. 1,755 |
about 63% |
| Australia | approx. 1,765 |
about 64% |
| Canada | approx. 2,411 |
about 73% |
While commercial cylinders used by hotels and businesses track the market dynamically—selling at ₹3,113.50 for a 19 kg tank in Delhi after five recent crisis-led hikes—the domestic cooking gas network has been intentionally insulated from these sharp market adjustments.
The Anatomy of the International Cost Surge
India used to import 60 per cent of its LPG requirements, and the landed cost tracks the Saudi Contract Price (CP) set by Saudi Aramco at the start of each month. Following the closure of the Strait of Hormuz in late February, the international benchmark spiked sharply.
The tracking below outlines exactly how international Propane and Butane costs rose, creating a massive price gap that the Indian government chose to absorb rather than pass down to the citizens:
| Period, 2026 | Propane CP (US$/t) | Butane CP (US$/t) | Saudi CP for LPG, 50:50 blend (US$/t) |
|---|---|---|---|
| February (before the disruption) | 545 | 540 |
542.50 |
| April (after the Hormuz disruption) | 750 | 800 |
775.00 |
| June (latest) | 760 | 820 |
790.00 |
| Increase, February to June | +215 (+39%) | +280 (+52%) |
+247.50 (about +46%) |
Beating the Strait of Hormuz Disruption
The stability of India’s gas supply is a feat of aggressive logistics coordination. When conflict flared up around the crucial Strait of Hormuz—a maritime choke point that handles nearly a fifth of global oil and 54% of India’s total LPG imports—commercial shipping slowed to a near standstill.
Instead of letting supply dry up, India became one of the few nations to keep its energy cargo consistently moving. The government implemented a rapid, emergency strategy:
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Aggressive Domestic Push: Local LPG production was rapidly spun up by more than 60%, jumping from 32 TMT to roughly 52 TMT to instantly offset import limitations.
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Global Sourcing Diversification: Supply chains were immediately widened to nations completely clear of the Hormuz choke point, routing new shipments from the United States, Canada, and Algeria.
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Crackdown on Black Marketing: To ensure subsidized domestic gas wasn’t illegally diverted to commercial businesses, anti-diversion enforcement was tightened, pushing OTP-based delivery verifications up to an impressive 90%.
The Financial Cushion: Who Bears the Burden?
Protecting hundreds of millions of households from international volatility comes with a massive price tag for the exchequer. The under-recovery represents the steep gap between the soaring international cost of the molecule and the regulated domestic retail price.
The massive scale of this state-funded welfare protection is laid out in the official financial tracking below:
| Window | Mechanism (domestic LPG only) | Amount |
|---|---|---|
| FY 2024–25 | Cumulative under-recovery on domestic LPG (year before) |
₹41,338 crore |
| FY 2025–26 | Cumulative under-recovery on domestic LPG (by end of last financial year) |
₹60,000 crore |
| FY 2025–26 | Cabinet-approved compensation to marketing companies for LPG under-recovery |
₹30,000 crore |
| Per cylinder | Under-recovery now absorbed on each domestic 14.2 kg cylinder |
about ₹700 |
| Since 2016 | PMUY connections and direct benefit transfer (₹300 a cylinder) |
10.58 crore connections |
To keep public sector oil marketing companies stable, the Union Cabinet stepped in to approve a ₹30,000 crore direct compensation package. Over and above this structural cushion, targeted direct benefit transfers continue to deposit ₹300 per cylinder straight into the bank accounts of more than 10.58 crore Ujjwala connections.
Even with this unprecedented safety net fully active, the Ministry has urged citizens to view domestic LPG as a precious national resource and adopt energy-efficient cooking habits to prevent avoidable waste.
