Commercial LPG prices have surged in India, with state-owned oil marketing companies raising the price of a 19-kg cylinder by Rs. 993 from May 1. The substantial increase brings the price in Delhi to Rs. 3,071.50, one of the sharpest price hikes in recent years and the third consecutive monthly increase.
LPG prices have spiked amid escalating geopolitical tensions in West Asia, including around the Strait of Hormuz, a key energy corridor through which around 20% of global oil exports pass. This has had a major effect on global energy markets, resulting in a rise in the prices of crude oil and an increase in the cost of inputs for fuel-intensive industries.
Prices for commercial LPG have now increased by over Rs. 1,300 in the last three months, after earlier increases of Rs. 144 in March and almost Rs. 200 in April. The hike will have a significant impact on restaurants, hotels and small enterprises that use commercial LPG cylinders.
Even with the steep increase in commercial gas prices, domestic LPG prices have remained steady. The cost of a 14.2-kg domestic gas cylinder is still around Rs. 913 in Delhi as the government seeks to cushion the price effect of global price fluctuations.
Responding to the price move, Indian Oil said: "The retail prices of petrol, diesel and domestic LPG (14.2 kg cylinders) have remained unchanged, fully insulating domestic consumers from the recent increase in international fuel prices."
It also noted that commercial LPG accounts for only around 1% of total LPG consumption, enabling the company to indulge in price management while not impacting household consumption.
Post the recent increase, commercial LPG prices in major cities are now:
Mumbai: Rs. 3,024
Bengaluru: Rs. 3,152
New Delhi: Rs. 3,071.50
Kolkata: Rs. 3,202
Chennai: Rs. 3,237
These higher rates are part of the growing expenses in business cities.
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Apart from LPG, Indian Oil also announced hikes in bulk diesel and aviation turbine fuel (ATF), but did not specify the rates.
It added: "Price adjustments have been made only for a few industrial users, which account for a small proportion of the total consumption and are regularly revised every month based on international benchmark prices."
The price surge is accompanied by new LPG booking and delivery rules. These include extended booking cycles (up to 25 days in cities) and OTP authentication during delivery. Aadhaar eKYC has also been mandated for consumers receiving government subsidies.