In a major update for households across India, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, announced a ₹50 hike in the price of LPG cylinders, applicable from April 8, 2025. The announcement, made during a press conference on April 7, sheds light on the economic challenges faced by Oil Marketing Companies (OMCs) and the government’s strategy to balance consumer affordability with fiscal pressure.

Revised LPG Prices for Different Segments

Under the new pricing structure:

• 14.2-kg domestic LPG cylinder will now cost ₹853, up from ₹803 for non-Ujjwala beneficiaries.

• For Ujjwala Yojana beneficiaries, the price is ₹553 per cylinder, thanks to the subsidy cushion still in place.

This pricing policy affects millions of households who rely on LPG for daily cooking and domestic needs. The revision aims to address the significant under-recoveries borne by OMCs over the past fiscal year.

What Led to the LPG Price Increase?

According to Minister Puri, international LPG prices have surged from $415 per metric tonne (MT) to $712 per MT, exerting pressure on domestic suppliers. Despite this, he said that the government had refrained from passing on the burden to consumers until now.

He stated:

“The Rs 50 increase on LPG cylinders addresses the current under-recovery and not the backlog.”

He further revealed that OMCs suffered a cumulative under-recovery of ₹41,338 crore in the last financial year, necessitating a partial correction in pricing.

15-Day Price Review Mechanism

To ensure price rationality, LPG rates will now be reviewed every 15 days, depending on global prices. This dynamic pricing model will enable quick adjustments in line with international markets, thus minimising the impact on consumers during price declines while recovering losses during price hikes.

This new framework aligns LPG pricing with international trends, helping maintain financial sustainability for OMCs while ensuring government support to vulnerable segments like Ujjwala beneficiaries.

No Impact on Petrol and Diesel Prices – Yet

While the LPG prices are going up, Puri clarified that there will be no immediate price hike for petrol and diesel, despite the rising excise duty. He assured that Oil Marketing Companies will manage petrol and diesel prices independently.

“You can legitimately expect prices of petrol and diesel to be moderated by the oil marketing companies in keeping with the global price,” he said.

This indicates that price regulation for transport fuels may remain indirect, depending on global benchmarks and market flexibility.

Ujjwala Beneficiaries: Still Protected

Despite the price hike, Ujjwala Yojana beneficiaries will continue to enjoy significant subsidies, with their price capped at ₹553. The Ujjwala scheme, launched to provide clean cooking fuel to low-income families, remains a cornerstone of the government’s pro-poor energy policy.

This pricing difference demonstrates the dual-pricing strategy adopted by the government—ensuring subsidies where needed while phasing out benefits for those who can afford the market price.

Historical Context and Political Angle

Fuel prices have always been a sensitive political subject in India, with both the ruling and opposition parties using them to frame narratives. The latest price hike comes at a time when inflation and cost of living are already under scrutiny, and this move could invite criticism or protests from opposition parties.

However, the government maintains that this modest ₹50 hike is essential for long-term sustainability, especially when international benchmarks rise sharply.

Breakdown of OMC Losses

The ₹41,338 crore under-recovery reported by OMCs in the previous financial year includes losses incurred due to:

• Absorbing international price shocks

• Keeping domestic LPG prices stable

• Delayed subsidy reimbursements

• Managing supply logistics during high crude volatility

This increase is expected to cover only a fraction of that loss, indicating that more hikes or government interventions might follow, depending on how international trends evolve.

What’s Next for Consumers?

For Indian households, this hike is a wake-up call about the volatility in fuel markets. While it’s unlikely to immediately disrupt usage patterns, it will:

• Add to monthly household expenses

• Trigger discussions around fuel efficiency and alternative sources

• Potentially reignite conversations about subsidy reforms

Many consumers might begin looking into energy alternatives like piped natural gas (PNG), electric stoves, or solar cookers, especially in urban regions.

Conclusion

The ₹50 hike in LPG gas cylinders from April 8 is a calculated move by the government to balance international price pressures, domestic affordability, and OMC recovery. While the impact on Ujjwala users remains minimal, the price increase for non-subsidised users underscores the changing dynamics of India’s fuel pricing policy.

As prices continue to be reviewed every 15 days, future revisions—up or down—are likely, depending on global LPG trends and fiscal strategy. For now, the government walks a tightrope, ensuring economic stability without triggering major consumer unrest.

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