LPG Revenue Loss For State Retailers Narrows To ₹188 Per Cylinder In August

The revenue loss incurred by India's state-owned fuel retailers on subsidised LPG cylinder sales narrowed sharply to ₹188 per 14.2-kg cylinder in August, down from ₹500 in July, junior oil minister Suresh Gopi told Parliament on Monday.

Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have been selling a 14.2-kg domestic LPG cylinder at ₹942 in Delhi since June 2026. These companies sell cooking gas to households below market rates, with the government compensating the resulting revenue shortfall after a time lag.

Gopi, in a written reply to lawmakers, said the government had disbursed ₹30,000 crore in subsidies to partly clear dues for 2025-26 and 2026-27. Despite this payout, outstanding dues owed to state-run fuel retailers for LPG sales stood above ₹59,000 crore as of July 31.

Why The Subsidy Exists

The compensation mechanism is designed to protect households from sharp fluctuations in international LPG prices, while ensuring state-run oil marketing companies do not absorb the full cost of selling cooking gas below market rates. The per-cylinder loss for retailers had spiked to ₹500 in July before easing in August.

Officials said the government has relied on subsidies and other support measures over the years to keep domestic LPG affordable for households. The difference between the market-linked cost of LPG and its retail price is compensated through government payments at a later stage.

India imports a large share of its LPG needs, which makes domestic cooking gas prices vulnerable to changes in international energy prices, freight costs and currency fluctuations. The government has also taken steps to prioritise domestic LPG supplies amid volatility and disruptions in global energy markets.

The subsidy burden and pending compensation to state-run fuel retailers continue to be significant factors affecting the financial position of the country's oil marketing companies.