Commercial LPG up by nearly Rs 1,000: Why have prices increased?

Commercial LPG cylinder prices have risen again as global oil tensions keep costs elevated. The move shields households for now but raises pressure on restaurants, hotels and small businesses.

In Short

• Commercial LPG price in Delhi rises to Rs 3,071.50 for 19-kg cylinder
• Retail LPG and fuel prices unchanged to protect household consumers
• Commercial LPG hike impacts businesses, may push food prices higher

Commercial LPG cylinder prices have seen a sharp increase again, with a 19-kg cylinder in Delhi now costing Rs 3,071.50. The latest hike, which comes close on the heels of last month’s increase, is being driven by a mix of global oil tensions and India’s pricing strategy.

At the heart of the price hike is the steady rise in global crude oil prices. Brent crude is hovering around $111 per barrel, while WTI crude is above $105, reflecting continued tightness in supply.

This surge is linked to the ongoing US-Iran deadlock, which has raised concerns over disruptions in the Strait of Hormuz — a key global oil route through which nearly a fifth of the world’s oil passes.

With tensions escalating and the possibility of supply disruptions increasing, global oil markets have turned volatile. Even the risk of reduced flows through Hormuz has been enough to push prices higher, which directly impacts LPG pricing.

Another factor adding to the pressure is uncertainty within OPEC, especially after the UAE’s decision to exit the grouping.

The UAE, one of the larger oil producers, stepping away from coordinated production controls could weaken supply discipline over time. This creates further uncertainty in already tight global markets, keeping oil prices elevated.

WHY ONLY COMMERCIAL LPG PRICES ARE RISING

Despite rising global fuel costs, the government has chosen to shield retail consumers.

Prices of petrol, diesel and domestic LPG cylinders (14.2 kg) have been kept unchanged. These segments account for nearly 80–90% of consumption, and keeping them stable helps control inflation and protect household budgets.

However, this also means oil marketing companies cannot absorb the entire cost burden.

To balance this, price revisions are being passed on to smaller segments like commercial LPG, which accounts for less than 1% of total consumption.

This is why restaurants, hotels and small businesses are seeing the impact, while household consumers are not — at least for now.

IMPACT ON BUSINESSES AND CONSUMERS

The hike in commercial LPG will directly affect sectors like food services, hospitality and small-scale manufacturing.

Since these businesses rely heavily on LPG for daily operations, higher input costs are likely to be passed on to customers.

This could lead to an increase in food prices, especially in restaurants and street food segments.

WILL DOMESTIC LPG PRICES ALSO GO UP?

For now, domestic LPG prices remain unchanged, as the government continues to absorb the cost to protect consumers.

However, if global crude prices remain elevated for a prolonged period, sustaining this cushion may become difficult. In such a scenario, there could be pressure to revise domestic LPG prices as well.

For now, the strategy remains clear, protect households, pass on costs to commercial users, and manage inflation risks in a volatile global environment.

- Ends