The Finance Ministry on Monday (April 7, 2025) hiked the price of domestic liquefied petroleum gas (LPG) by ₹50 per cylinder, in both subsidised and non-subsidised categories. While it also notified an increase in excise duties on petrol and diesel by ₹2, there will be no impact on retail prices.
Excise duties are now set for ₹13 and ₹10 for each litre of petrol and diesel sold in the country respectively.
Petroleum Minister Hardeep Singh Puri said that the excise duty hikes were aimed at compensating oil marketing companies (OMCs) for selling LPG cylinders at a loss, in spite of the steady increase in their prices over the last few years internationally. The Minister also cited differences in petrol prices between “BJP States” and “non-BJP States,” with the latter charging higher State levies. “The difference between Itanagar and Chennai is ₹9.93,” Mr. Puri said, referring to LPG retail prices.
“The excise increase is intended to compensate the oil marketing companies for the ₹43,000 crore that they have incurred as a loss on the gas part [of their businesses],” Mr. Puri said. He denied that the government was pushing against a fuel price decrease against the backdrop of lower crude prices. In fact, he said, fuel prices may still decrease if current trends hold.
“India imports more than 60% of its domestic LPG consumption,” Ministry sources said. “Prices of LPG in the country are linked to its price in the international market. Government continues to modulate the effective price to consumer for domestic LPG … While the average Saudi Contract Price [international benchmark for LPG pricing] rose by 63% [from $385 per metric tonne in July 2023 to $629 per metric tonne in February 2025], the effective price for Pradhan Mantri Ujjwala Yojana [PMUY] consumers for domestic LPG was reduced by 44% [from ₹903 in August 2023 to ₹503 in February 2025].”
Brent crude prices have been declining over the last few days in the aftermath of the announcement of the U.S.’s “reciprocal” tariffs on most countries. From a peak of $74.95 on April 2, the price on Monday was around $10 less, as the Organization of the Petroleum Exporting Countries, led primarily by Saudi Arabia, announced an increase in the oil they would make available. The current price level of $64–65 is the lowest since mid-2021, when COVID-19 lockdowns were lifted.
OMCs, who have been deregulated to set their own prices, will have the “headroom in order to look at price moderation but not in the upward category in the downward category,” Mr. Puri said. It’s not likely that this will happen immediately. “The inventories that [OMCs] are carrying are 45 days old,” Mr. Puri said. “The inventories are very clearly [bought] at a much higher price.”
Mr. Puri also categorically denied that the duties were being hiked to prepare fiscally for any “headwinds” as a result of the U.S. tariffs.
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