LPG Price Review: In April, the government increased the price of 14.2 kg LPG cylinder by ₹ 50. This increase has happened after almost a year.
Now the cylinder has reached ₹ 853 in Delhi and ₹ 879 in Kolkata. LPG has now become a basic need of the common people, but without improving production and supply chain, it is difficult to control prices. The biggest challenge before the government is to strike a balance between increasing demand and dependence on imports.
32.9 crore LPG connections
According to Mint’s report, in 2015, India had 14.9 crore LPG connections, which increased to 32.9 crore by 2025. That is, every family of 4 people has a connection, but domestic production has been stuck at around 12-13 lakh tonnes for the last 8 years. In 2024-25, only 11.7 lakh tonnes were produced against the consumption of 28.6 lakh tonnes. The result is that LPG imports increased by 20% in 10 years. Now domestic prices depend on the international market.
There was a brake on prices during the elections: Before and after the 2024 general elections, domestic prices were not increased despite the rise in international prices. Now this increase is the result of that.
Impact of government schemes
Ujjwala Yojana increased connections: Out of 32.9 crore connections, 10.33 crore are under the Ujjwala Yojana, where the poor get cylinders for ₹ 300 less. In southern states (like Tamil Nadu, Andhra Pradesh), only 10% are beneficiaries of the Ujjwala Yojana because state schemes are already running.
Subsidy status: In the budget for 2025-26, the government has allocated ₹11,100 crore for LPG subsidy. Last year (2022-23), ₹22,000 crore was given to oil companies as they were selling cylinders at a loss.
What is the challenge ahead
It is difficult to increase domestic production: Refineries are more interested in making petrol and diesel, while reducing LPG production. Due to cheap LPG imports from America, companies are not interested in increasing domestic production.
Lack of distributors: Between 2015 and 2020, the number of distributors increased from 15,930 to 24,670, but only 1,000 were added in the last 5 years.
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