The under-recovery on domestic LPG fell sharply to Rs 188 per 14.2-kg cylinder in August 2026 from more than Rs 700 in June, as the cost of LPG supplies eased after disruptions caused by the West Asia conflict.
This means OMCs (Oil Marketing Companies) are currently absorbing a loss of Rs 188 on every cylinder sold at the existing retail price, compared with a loss of more than Rs 700 per cylinder in June 2026, when the crisis was at its peak. The retail selling price (RSP) of a 14.2-kg domestic LPG cylinder, however, has remained unchanged at Rs 942 in Delhi.
According to Minister of State for Petroleum and Natural Gas Suresh Gopi, in a written reply to the Rajya Sabha, the accumulated under-recoveries of public sector oil marketing companies (OMCs), including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation Limited (HPCL), on domestic LPG stood at more than Rs 59,000 crore as of July 31.
The under-recovery on domestic LPG was more than Rs 700 per cylinder in June and around Rs 500 in July.
“The Retail Selling Price of domestic LPG is being maintained at Rs. 942 per 14.2 Kg cylinder (Delhi) since June 2026, which carried an implicit subsidy (under-recovery) of more than Rs 700 per 14.2 Kg cylinder in June 2026 and Rs 500 per cylinder during July 2026. Even for the month of August 2026, the RSP of 14.2 Kg cylinder carries an implicit subsidy of Rs. 188 per cylinder,” said Gopi.
Gopi said the government had paid Rs 22,000 crore to the OMCs as compensation in FY 2022-23 and was paying Rs 30,000 crore during FY 2025-26 and FY 2026-27. Despite the compensation, the accumulated under-recoveries of PSU OMCs on domestic LPG remained above Rs 59,000 crore as of July 31.
The more than 100-day West Asia conflict disrupted the movement of cargo through the Strait of Hormuz, a key route for India's crude oil, LNG and LPG supplies. India imports nearly 88% of its crude oil requirements, while the Strait accounted for about 40% of its crude oil imports, 50% of LNG imports and 90% of LPG imports before the crisis.
The disruption forced India to increase domestic LPG production and diversify its imports, particularly from the US. According to data from maritime intelligence firm Kpler, India imported 912.39 thousand tonnes of LPG from the US in July, the highest among all supplier countries.
On the other hand, LPG imports from Qatar, one of India's major suppliers, declined sharply during the period. Imports from Qatar fell from 431.02 thousand tonnes in February to 214.28 thousand tonnes in March and 86.82 thousand tonnes in April. Supplies fell further to 19.32 thousand tonnes in May, remained absent in June and recovered to 19.32 thousand tonnes in July.