The Ministry of Petroleum and Natural Gas stated on Sunday that Indian households continue to pay among the lowest cooking gas prices globally. Domestic LPG prices were increased by Rs 29 per cylinder from Sunday due to rising costs stemming from the West Asia crisis. The government continues to modulate the effective price to the consumer for domestic LPG, absorbing the burden of sharp international cost increases upstream rather than passing it to the consumer.
India vs Other Countries
A Pradhan Mantri Ujjwala Yojana (PMUY) beneficiary receives a direct benefit transfer of Rs 300 per cylinder on the first four refills each year, which is roughly the average annual consumption of a typical Ujjwala household. Thus, they pay an effective Rs 642 on those refills. Even a non-PMUY household pays about Rs 700 below the market-linked cost of the cylinder. The price per 14.2 kg cylinder in India (Ujjwala, effective after revision) stands at Rs 642, compared to Rs 1,046 in Pakistan, Rs 1,207 in Nepal, about Rs 1,225 in Bangladesh, Rs 1,241 in Sri Lanka, about Rs 1,755 in the United States, about Rs 1,765 in Australia, and about Rs 2,411 in Canada.
However, the ministry release does not account for purchasing power parity or household incomes. Given India's lower per-capita purchasing power, cooking gas can remain less affordable for Indian households in income terms despite lower headline prices.
Impact of Hormuz Closure
The Saudi CP benchmark for LPG has risen by about 46 percent between February and June 2026 as the Hormuz disruption tightened Gulf supply, taking the cost of supplying a 14.2 kg cylinder to over Rs 1,600. About 54 percent of India's LPG consumption was routed through the Strait of Hormuz, leaving the cooking-gas supply directly exposed to the disruption. India was among the few that kept its energy cargoes moving through the Strait, with no shortage of any petroleum product. Domestic LPG production was raised by more than 60 percent, from about 32 TMT to about 52 TMT, to offset constrained imports.
Under-Recovery and Subsidy
The under-recovery — the gap between the international cost and the regulated retail price — on domestic LPG reached Rs 60,000 crore by the end of the last financial year, up from Rs 41,338 crore the year before. The Union Cabinet has approved compensation of Rs 30,000 crore to marketing companies on this account. The effective Ujjwala price of the first four cylinders at Rs 642 is at a discount of about 60 percent to the actual international price of an LPG cylinder, and the non-PMUY price of Rs 942 is at a discount of about 45 percent to the international price.
