The minister of state in the petroleum ministry, Suresh Gopi, told the Rajya Sabha on August 10 that the cumulative under‑recovery incurred by state‑run oil marketing companies on domestic LPG sales had climbed to over Rs 59,000 crore as of July 31, 2026, despite the government disbursing Rs 52,000 crore in compensation up to FY27.
The retail selling price (RSP) of domestic LPG is set at Rs 942 per 14.2‑kg cylinder in Delhi since June 2026. In June 2026, this price carried an implicit subsidy of more than Rs 700 per cylinder, and in July 2026 the subsidy fell to Rs 500 per cylinder. Even for August 2026, the RSP of a 14.2‑kg cylinder still carries an implicit subsidy of Rs 188 per cylinder.
For the more than 10.5 crore Ujjwala beneficiaries, the effective price of LPG is only Rs 642 per cylinder (up to four refills per year) after a targeted subsidy of Rs 300 per cylinder.
The government has already paid OMCs a compensation of Rs 22,000 crore in FY23 and will pay Rs 30,000 crore each in FY26 and FY27.
The three oil marketing companies—Indian Oil, Bharat Petroleum Corp, and Hindustan Petroleum Corp—have been selling domestic cooking gas below market prices, creating large under‑recoveries, after international LPG prices surged significantly following the West Asia war and the closure of the Strait of Hormuz.
Saudi CP for LPG was about $543 per tonne in February, before the disruption. After the closure of Hormuz in late February, the April contract price rose to $775 per tonne, and by June it edged up to $790 per tonne. The blended LPG benchmark has therefore risen by about 46% since the pre‑crisis February level.
The minister also informed Parliament that, despite unprecedented volatility in international crude oil and product prices due to conflicts and other factors, the increase in retail petrol and diesel prices in India between June 2021 and June 2026 has been lower than in major developed and neighbouring countries. According to government data, India saw an 8.1 percent rise in petrol prices and an 11.5 percent rise in diesel prices over that period.