The Finance Ministry on Monday (April 7, 2025) hiked the price of domestic liquefied petroleum gas (LPG) by \u20b950 per cylinder, in both subsidised and non-subsidised categories. While it also notified an increase in\u00a0excise duties on petrol\u00a0and diesel by \u20b92, there will be no impact on retail prices.<\/p>\n\n\n\n
Excise duties are now set for \u20b913 and \u20b910 for each litre of petrol and diesel sold in the country respectively.<\/p>\n\n\n\n
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 \u201cBJP States\u201d and \u201cnon-BJP States,\u201d with the latter charging higher State levies. \u201cThe difference between Itanagar and Chennai is \u20b99.93,\u201d Mr. Puri said, referring to LPG retail prices.<\/p>\n\n\n\n
\u201cThe excise increase is intended to compensate the oil marketing companies for the \u20b943,000 crore that they have incurred as a loss on the gas part [of their businesses],\u201d 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.<\/p>\n\n\n\n
\u201cIndia imports more than 60% of its domestic LPG consumption,\u201d Ministry sources said. \u201cPrices 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 \u2026 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 \u20b9903 in August 2023 to \u20b9503 in February 2025].\u201d<\/p>\n\n\n\n
Brent crude prices have been declining over the last few days in the aftermath of the announcement of the U.S.\u2019s \u201creciprocal\u201d 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\u201365 is the lowest since mid-2021, when COVID-19 lockdowns were lifted.<\/p>\n\n\n\n
OMCs, who have been deregulated to set their own prices, will have the \u201cheadroom in order to look at price moderation but not in the upward category in the downward category,\u201d Mr. Puri said. It\u2019s not likely that this will happen immediately. \u201cThe inventories that [OMCs] are carrying are 45 days old,\u201d Mr. Puri said. \u201cThe inventories are very clearly [bought] at a much higher price.\u201d<\/p>\n\n\n\n
Mr. Puri also categorically denied that the duties were being hiked to prepare fiscally for any \u201cheadwinds\u201d as a result of the U.S. tariffs.<\/p>\n\n