Union Coal and Mines Minister G. Kishan Reddy on Sunday, June 7, 2026, highlighted that Indian households continue to access cooking gas at prices far below international market levels, even as global LPG benchmark prices have risen sharply and disruptions in the Strait of Hormuz have strained supply chains worldwide.

Context

Reddy's post underscores that despite a nearly 46% rise in international LPG benchmark prices since February 2026, the government has absorbed the bulk of the cost escalation rather than passing it on to consumers. He noted that the actual cost of supplying a domestic LPG cylinder has risen to over ₹1,600, yet general consumers pay only ₹942 per cylinder — a gap that reflects substantial under-recovery borne by oil marketing companies and the exchequer.

Beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY) receive an additional ₹300 per cylinder on the first four refills each year through direct benefit transfer, bringing their effective price down to ₹642 per cylinder. More than 10.58 crore Ujjwala beneficiaries are currently covered under this support.

Policy Backdrop

The Pradhan Mantri Ujjwala Yojana was launched in May 2016 to provide LPG connections to women from below-poverty-line households, initially targeting 5 crore connections. The scheme was subsequently expanded in scope and scale, with refill subsidies delivered via the PAHAL Direct Benefit Transfer mechanism — first rolled out in 2013-14 — to reduce leakages and ensure targeted delivery.

Since 2014, successive administrations have maintained large LPG subsidies as a core welfare instrument while gradually moving toward market-linked pricing for general consumers. Global energy price shocks following 2022 prompted repeated absorption of under-recoveries and accelerated efforts to diversify import sources and raise domestic natural gas output. Reddy's statement places the current episode within that continuing policy posture.

The Ministry of Petroleum and Natural Gas coordinates LPG pricing and supply security alongside oil marketing companies, and has pursued diversified sourcing strategies to insulate India from chokepoint-specific risks such as those posed by the Strait of Hormuz, through which a significant share of India's imported crude and LPG transits.

Stakeholders and Impact

The direct beneficiaries of the current pricing shield are 10.58 crore Ujjwala households — predominantly rural women from economically weaker sections — and the broader base of domestic LPG consumers across India. Reddy's post also drew a comparative frame, stating that Indian LPG prices remain 'significantly lower' than those in neighbouring countries including Pakistan, Nepal, Bangladesh, and Sri Lanka, as well as advanced economies such as the United States, Australia, and Canada.

Oil marketing companies and the central exchequer carry the financial burden of the gap between supply cost and consumer price. The scale of under-recovery — with supply costs exceeding ₹1,600 against a consumer price of ₹942 — signals a significant fiscal commitment that will likely feature in discussions around the forthcoming Union Budget or supplementary demands.

What's Next

The immediate policy watch is the next revision of domestic LPG prices by oil marketing companies and whether additional subsidy allocations will be made in upcoming budget exercises to cover widening under-recoveries. Any further escalation in international benchmark prices or continued disruption at the Strait of Hormuz could intensify pressure on the fiscal arithmetic underpinning the current consumer price shield.

The government's stated commitment to 'timely policy interventions, increased domestic production and diversified sourcing' as instruments of energy security suggests that structural supply-side measures, rather than price pass-throughs alone, will remain central to India's response to global energy volatility in the near term.