The government has increased the prices of domestic liquefied petroleum gas (LPG) by ₹29 per 14.2 kg cylinder, marking the first hike in the current financial year. With the latest revision, the price of a domestic LPG cylinder in Delhi will increase to ₹942 from ₹913.

However, this is the second increase in prices of domestic LPG—the cooking fuel for more than 33 crore households—since the conflict in West Asia intensified from February 28, 2026. On March 7th, the government had raised domestic LPG prices by ₹60 per 14.2 kg cylinder.

The Oil Ministry on Sunday said “The cost of supplying a cylinder has risen to over ₹1,600, an under-recovery of about ₹700 on each domestic cylinder, against a Saudi CP for LPG that has risen by about 46 per cent since February.”

The Indian household continues to buy cooking gas much cheaper than the household in any neighbouring country, and far below the price paid in advanced economies such as the United States, Australia and Canada, it added.

A beneficiary of the Pradhan Mantri Ujjwala Yojana (PMUY) pays an effective ₹642 for a 14.2 kg cylinder, and the general consumer in Delhi ₹942, against a cost to supply that has now risen to over ₹1,600.

Any household can buy as many cylinders as it needs at ₹942. A PMUY beneficiary will additionally receive the direct benefit transfer of ₹300 a cylinder on the first four refills each year—broadly the average annual consumption of a typical Ujjwala household, the Ministry explained.

Even a non-PMUY household would pay about ₹700 below the market-linked cost of the cylinder. Retail prices differ marginally across locations on account of distribution costs, it added.

As the conflict tightened the Strait of Hormuz (SoH) most commercial traffic in the waterway was brought to a near halt. About 54 per cent of India’s LPG consumption was routed through the SoH, leaving the cooking-gas supply directly exposed to the disruption.

Rising under recoveries

The price hike comes after the under-recoveries of the PSU oil marketing companies (OMCs)—Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL)—started rising since the beginning of June.

The under recovery from selling LPG to domestic consumers below market rate has risen to around ₹700 per 14.2 kg cylinder as of June 4th from roughly ₹650 per cylinder last month. Even for the March 7, 2026 LPG cylinder price hike of ₹60, the government absorbed ₹74 per cylinder.

On Sunday’s hike, the Oil Ministry said “Following the June contract price, the cost of supplying a 14.2 kg cylinder, were it priced on an import-linked basis, has risen to over ₹1,600. The under-recovery now absorbed on each domestic cylinder is about ₹700.”

The scale of this is visible in the fully market-priced commercial cylinder: the 19 kg cylinder used by hotels and restaurants sells in Delhi at ₹3,113.50, about ₹164 a kg, after five increases during the West Asia crisis, it added.

The domestic household, by contrast, pays about ₹66 a kg after the revision. Commercial gas carries a higher rate of tax and larger margins, so it sits above the household’s cost-reflective level; even so, the import-linked cost of a domestic cylinder works out to over ₹1,600, it added.

Through the West Asia disruption the benchmark moved sharply higher. As the 50:50 propane-butane blend used for India’s LPG, the Saudi CP for LPG stood at about $543 a tonne in February, before the disruption.

Following the closure of the Strait of Hormuz in late February, the April contract price—the first set after the disruption tightened Mideast Gulf exports—rose to $775 a tonne, with propane at $750 and butane at $800, and has since edged up further to $790 a tonne in June.

The blended LPG benchmark has thus risen by about 46 per cent since the pre-crisis February level. The cost of the imported molecule rose with it.

Published on June 7, 2026