OMCs' losses on LPG: Domestic cylinder prices have been kept stable to protect the general public from inflation. Oil companies are bearing their own input costs, resulting in significant losses. 

OMCs' loss on LPG: Commercial LPG cylinder prices have been raised by up to ₹993 today. Following the increase in commercial cylinder prices on Friday morning, caused by rising energy prices worldwide amid the Iran-US war, the price of a 19-kilogram commercial cylinder in Gurgaon now stands at ₹3,088, up from ₹2,095 previously.

In Delhi, it costs ₹3,071.50. Domestic LPG prices remain unchanged, with only one increase of ₹60 in March this year. Domestic cylinder prices have been kept stable to protect the general public from inflation. Oil companies are absorbing input costs, resulting in significant losses. 

Companies suffered losses of more than Rs 40,000 crore.

According to one estimate, state-owned oil marketing companies (OMCs) are expected to incur losses of approximately ₹40,484 crore by the end of May. This loss will be due to under-recovery on LPG cylinders as international oil prices remain high due to ongoing tensions in West Asia.

According to the report, oil companies are incurring a loss of approximately ₹380 per 14.2 kg domestic LPG cylinder. The Petroleum Ministry said, "Last year too, out of the total loss of ₹60,000 crore, ₹30,000 crore was borne by the state-owned oil companies (PSUs) and ₹30,000 crore was borne by the Government of India to protect Indian citizens from the impact of high international LPG prices."

Why was the price of a commercial cylinder increased?

Indian state-owned refiners increased the price of commercial LPG cylinders by ₹195.50, effective April 1st. This increase has continued since then. The government stated that this increase was due to a 44% increase in the Saudi contract price.

The Saudi contract price, an international benchmark for Indian prices, rose from $542 per metric ton (MT) in March to $780 per metric ton in April. Global LPG prices have risen because 20-30% of global LPG supplies are stuck in the Strait of Hormuz due to escalating conflict in the region.