3 weeks ago
LPG under-recoveries of oil PSUs cross Rs 59,000 crore
Cooking gas in India is sold by three government-owned companies: Indian Oil, Bharat Petroleum and Hindustan Petroleum.
These companies sell kitchen gas to families for less money than it costs them to buy it.
The world price of gas jumped very high after a war in West Asia and the closing of a very important sea route called the Strait of Hormuz.
Because of this, the three companies lost more than Rs 59,000 crore by July 31, 2026.
The government chooses to keep prices low so that families can afford to cook food.
The money the companies lose is called an "under-recovery" - a bit like when a shop sells something for less than it paid for it.
Families under the Ujjwala scheme get an even bigger discount, paying only Rs 642 per cylinder.
The government gives the companies some money to help cover these losses, but it is not enough to cover everything.
The government also says that petrol and diesel prices in India went up much less than in other countries over the past five years.
Cumulative under-recoveries of state-run oil marketers Indian Oil, Bharat Petroleum and Hindustan Petroleum on domestic LPG sales crossed Rs 59,000 crore as of July 31, 2026, Parliament was told.
The retail price of a 14.2 kg domestic LPG cylinder in Delhi has been held at Rs 942 since June 2026, carrying an implicit subsidy of over Rs 700 in June and Rs 500 in July.
More than 10.5 crore Ujjwala beneficiaries pay an effective price of Rs 642 per cylinder (up to 4 refills a year) after a targeted subsidy of Rs 300 per cylinder.
The government paid oil companies Rs 22,000 crore in FY23 and will pay Rs 30,000 crore in FY26 and FY27 as compensation.
Under-recoveries piled up after international LPG prices surged following the West Asia war and closure of the Strait of Hormuz, with the Saudi CP benchmark rising about 46% from February to June.
- Who
- Indian Oil, Bharat Petroleum and Hindustan Petroleum, the government-owned oil marketing companies; Minister of State for Petroleum and Natural Gas Suresh Gopi informed the Rajya Sabha.
- What
- Cumulative under-recoveries on domestic LPG sold below market price crossed Rs 59,000 crore.
- Where
- India (New Delhi); losses were driven by the West Asia war and closure of the Strait of Hormuz.
- When
- As of July 31, 2026; disclosed to Parliament on Monday in August 2026.
- Why
- Retail LPG prices were kept low while international LPG prices surged after the West Asian conflict and Strait of Hormuz closure.
Key facts
- Total under-recoveries
- More than Rs 59,000 crore as of July 31, 2026
- Retail price (14.2 kg cylinder, Delhi)
- Rs 942 since June 2026
- Implicit subsidy per cylinder
- Over Rs 700 (June 2026), Rs 500 (July 2026), Rs 188 (August 2026)
- Ujjwala beneficiaries
- More than 10.5 crore; Rs 642 per cylinder (up to 4 refills per year)
- Targeted subsidy (Ujjwala)
- Rs 300 per cylinder
- Government compensation
- Rs 22,000 crore (FY23); Rs 30,000 crore (FY26 and FY27)
- Saudi CP for LPG (blended)
- $543/tonne (February) to $790/tonne (June), up about 46%
- Petrol and diesel price rise (June 2021-June 2026)
- Petrol 8.1%, diesel 11.5%
Quotes
Suresh Gopi
Minister of State for Petroleum and Natural Gas
“Even after the payment of this compensation, accumulated under‑recoveries of the public sector oil companies on domestic LPG were more than Rs 59,000 crores as of 31 July 2026 itself.”
thehansindia.com









