The Indian government is keeping cooking gas prices among the world's lowest despite a 46% jump [1] in the global LPG benchmark.
This policy aims to shield millions of households from energy price volatility caused by supply disruptions in West Asia. By absorbing the increased cost of imports, the government prevents sudden inflation in essential household expenses for both urban and rural consumers.
Official data indicates that the supply cost per LPG cylinder is approximately Rs 1,600 [2]. Because the government maintains lower retail rates, it incurs a loss of about Rs 700 [2] on every refill provided to consumers.
To further support low-income families, beneficiaries of the Ujjwala scheme continue to receive a ₹300 per cylinder subsidy on eligible refills [1]. This targeted support ensures that the most vulnerable populations maintain access to clean cooking fuel, regardless of international market fluctuations.
The financial burden of these subsidies and price caps is significant. Cumulative under-recovery on domestic LPG reached Rs 60,000 crore [2] by the end of the 2025-26 financial year. This represents a sharp increase from the previous financial year, when the cumulative under-recovery was Rs 41,338 crore [2].
Government officials said these measures are necessary to protect the domestic economy from the global energy crisis. The decision to maintain current pricing structures comes as the administration manages the balance between fiscal deficits and public welfare obligations.
“India is keeping cooking gas prices among the world's lowest despite a 46% jump in the global LPG benchmark.”
India's decision to absorb massive LPG losses reflects a strategic priority of social stability over immediate fiscal consolidation. By shielding consumers from a 46% rise in global benchmarks, the government is preventing a potential spike in food inflation and protecting the progress of the Ujjwala scheme. However, the rise in under-recovery from roughly Rs 41,000 crore to Rs 60,000 crore suggests that sustained geopolitical instability in West Asia could place an unsustainable strain on the national budget.
