The cumulative under recovery on domestic LPG for the PSU Oil Marketing Companies (OMCs), even after the government compensated them with ₹52,000 crore till FY27, has ballooned to more than ₹51,000 crore as of June 2026.Retail price of LPG is being maintained at ₹942 per 14.2 kg cylinder, which carries an implicit subsidy (under-recovery) of more than ₹700 per cylinder in June 2026, said Oil Minister Hardeep Singh Puri in Lok Sabha.Even for July 2026, the implicit subsidy on each 14.2 kg domestic LPG cylinder is more than ₹500 per cylinder, he added on Thursday responding to a starred question.Puri informed the House that the government has already compensated the PSU OMCs for selling LPG below market prices.“Even after the payment of this compensation, accumulated under-recoveries of the PSU OMCs on domestic LPG were more than ₹51,000 crore as of June 30, 2026 itself,” the Minister said.Under recoveries of Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) ballooned due to selling LPG below international prices, which surged significantly after February 28, 2026 due to the West Asia conflict and closure of the Strait of Hormuz (SoH).For comparison, Equirus Securities said that average Saudi propane prices stood at $682 per tonne during Q1 FY27, growing roughly 26 per cent q-o-q and 17 per cent y-o-y.Puri pointed out that average Saudi CP (international benchmark) rose by up to $780 per tonne in April-May 2026. In June, it rose to $796 (excluding premium).While HPCL’s LPG under recovery stood at around ₹16,405.92 crore as of June 30, 2026, BPCL’s under recovery was at ₹15,803.74 crore during the same period.Prior to the outbreak of conflict in West Asia in February 2026, India used to import about 60 per cent of its LPG consumption, out of which about 90 per cent was transiting the SoH. With its closure supplies of imported LPG were severely constrained.Government took a series of measures to ensure stability in LPG supplies including increasing production from 34,000 tonnes per day (TPD) to 54 TPD, prioritisation of household usage, diversification of import sources and dynamic stock management.Puri noted that during the peak of the West Asia crisis, more than 56 crore domestic LPG cylinders were delivered from March to June, including over 12 crore cylinders to Ujjwala families.Published on July 24, 2026