India Cuts Commercial LPG Prices as Gulf Tensions Ease, Household Rates Unchanged

India’s state-run oil marketing companies have reduced the price of 19-kg commercial liquefied petroleum gas (LPG) cylinders from July 1, following an easing of tensions in the Arabian Gulf and improving fuel supplies.

The reduction marks the first cut in commercial LPG prices this year, offering relief to businesses and commercial users. However, prices for domestic LPG cylinders used by households remain unchanged.

Under the latest revision, the price of a 19-kg commercial LPG cylinder has been reduced by Rs183.50, or about Dh7. The revised prices range between Rs2,900 and Rs3,100 across India’s four major metropolitan cities of Delhi, Mumbai, Kolkata and Chennai.

The government also announced reductions in other fuel prices. Aviation turbine fuel for domestic airlines has been lowered by Rs5, while petrol and diesel prices have been cut by Rs5 and Rs3 per litre, respectively.

Despite the reduction in commercial fuel prices, household LPG rates have not been revised. The government has maintained that cooking gas for domestic consumers in India remains among the least expensive globally, with prices lower than those in neighbouring countries as well as in developed economies such as the United States, Canada and Australia.

According to the Ministry of Petroleum and Natural Gas, restrictions previously placed on commercial LPG supplies have now been removed as domestic production has improved and additional imported supplies are expected to arrive.

“In a major relief to industrial and commercial LPG consumers, the government has removed all sectoral restrictions on the supply of non-domestic packed LPG and restored supplies to the levels prevailing prior to the West Asia crisis,” the ministry said in a statement.

During the peak of the conflict in the Gulf, the Indian government invoked powers under the Essential Commodities Act to prioritise LPG production for household consumption. Feedstock normally allocated to petrochemical and industrial sectors was redirected to ensure uninterrupted supplies of cooking gas across the country.

Officials said domestic LPG production increased by more than 60% during that period. India also secured additional imports from countries including the United States, Canada and Algeria to maintain adequate supplies for millions of households.

The ministry has previously stated that prices of petroleum products in India are linked to international market trends, although the government continues to provide support for domestic LPG consumers through subsidy programmes.

Under the current system, households can purchase LPG cylinders at Rs942 each. Beneficiaries of the Pradhan Mantri Ujjwala Yojana receive a direct benefit transfer of Rs300 per cylinder on the first four refills each year.

Meanwhile, state-owned oil marketing companies are reportedly considering the creation of a strategic LPG reserve capable of meeting around 30 days of demand. The proposal is aimed at strengthening India’s energy security and reducing the risk of future supply disruptions, particularly if imports through the Strait of Hormuz are affected by geopolitical developments.