Even for the month of August 2026, the RSP of 14.2 kg cylinder carries an implicit subsidy of ₹188 per cylinder

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The under recovery of PSU oil marketing companies (OMCs) for supply liquefied petroleum gas (LPG) at below market rates has swelled to more than ₹59,000 crore in July 2026 from over ₹51,000 crore in June.Government have been ensuring availability of domestic LPG at affordable prices to households in the country for which it has paid to the OMCs a compensation of ₹22,000 crore in FY23 and is also paying ₹30,000 crore during FY26 and FY27, Minister of State for Petroleum & Natural Gas Suresh Gopi said in a written response in Rajya Sabha on Monday.“Even after the payment of this compensation, accumulated under-recoveries of the PSU OMCs on domestic LPG were more than ₹59,000 crore as of July 31, 2026 itself,” the Minister added.Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) cumulatively incurred under recovery of over ₹51,000 crore as of June 30, 2026.The Retail Selling Price (RSP) of domestic LPG is being maintained at ₹942 per 14.2 kg cylinder (Delhi) since June 2026, which carried an implicit subsidy (under-recovery) of more than ₹700 per cylinder in June 2026 and ₹500 per cylinder during July 2026, Gopi emphasised.Even for the month of August 2026, the RSP of 14.2 kg cylinder carries an implicit subsidy of ₹188 per cylinder. For more than 10.5 crore PMUY consumers, the effective price is only ₹642 per cylinder (upto 4 refills per year), after a targeted subsidy of ₹300 per cylinder, he added.PSU OMC under recovery 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).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 percent was transiting the SoH. With its closure supplies of imported LPG were severely constrained.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.Published on August 10, 2026