India’s Domestic LPG Under-Recovery Hits ₹700 per Cylinder Amid Rising Costs.
Current under recoveries from the sale of Liquefied Petroleum Gas (LPG) to domestic consumers have escalated to approximately ₹700 per 14.2 kg cylinder, up from ₹650 last month, as reported by Sujata Sharma, Joint Secretary in the Ministry of Petroleum & Natural Gas (MoPNG). The government has undertaken various measures to secure LPG availability, including ramping up domestic production and sourcing imports. On a recent day, around 54,000 tonnes of LPG were evacuated from various domestic sources to meet current demands, which stand at 72,000 tonnes per day, reflecting a temporary decrease compared to the usual 80,000 tonnes during the summer months, largely due to reduced consumption among commercial and industrial users.
This increase in under recovery signifies heightened financial pressure on public sector oil marketing companies (OMCs), which may ultimately influence retail prices of LPG for consumers. For the average household, especially those reliant on subsidized cylinders, this could translate into enduring supply constraints or adjustments in pricing, thereby impacting household budgets. The steps taken against hoarding and black marketing, including recent FIRs and inspections, aim to stabilize supply and protect consumers from inflated prices during peak demand periods. These actions reflect a proactive approach by the government to mitigate the impact on citizens.
Looking ahead, the government and RBI are likely to continue monitoring LPG supply dynamics closely, especially as demand fluctuates with seasonal patterns. In light of the current under recovery, they may consider policy adjustments to balance the financial viability of OMCs with consumer protection measures. Enhanced domestic production and strategic imports will be pivotal in addressing the supply-demand gap. Continued vigilance against hoarding and speculation will be essential, as this could mitigate price volatility and ensure that critical cooking fuel remains accessible to the millions of households that depend on it.
Source: The Hindu
(Expert Note: This report was independently prepared by the Wealthova Economy team.)