LPG supply stable, but oil firms still losing nearly Rs 700 on every cylinder sold

Oil Marketing Companies (OMCs) continue to face under-recoveries of nearly Rs 700 on every domestic LPG cylinder despite a range of measures taken by the government to strengthen supplies, ministry of petroleum and natural gas said on Thursday.

Addressing an inter-ministerial briefing, Sujata Sharma, joint secretary in the ministry of petroleum and natural gas, said that the government has stepped up domestic LPG production and secured imports to ensure adequate availability across the country.

"As far as the under recovery on LPG domestic cooking cylinder is concerned, it is still in the range of almost 700 rupees," Sharma said. The ministry further added that efforts to bridge the demand-supply gap have included both import tie-ups and a push in domestic production. Sharma said LPG output within the country has been ramped up significantly.

"One of the most important steps that has been taken, apart from tying up the import, is the domestic stepping up of the LPG production. If I give you the data from yesterday, then around 54 TMT of LPG was evacuated from different sources within the country," she said.

Demand moderates, supplies remain stable

According to Sharma, LPG demand has moderated due to a combination of factors, including reduced consumption from commercial and industrial users, changes in booking cycles and the adoption of delivery authentication systems.

"There has been a reduction because our commercial and industrial LPG... and the other reason is the booking period that we managed, I mean 25 days and 45 days. And the third reason is the DAC [Delivery Authentication Code] linked deliveries," she said.

The ministry also maintained that energy supplies remain unaffected despite developments in West Asia. Sharma said the country has adequate stocks of key fuels and refinery operations continue at normal levels.

"Despite the ongoing situation in West Asia, supplies of crude oil, LPG, and natural gas remain stable, and adequate stocks of petrol, diesel, and LPG are available in the country. Our refineries are operating at an optimum level," Sharma said.

LPG distribution and PNG expansion

Highlighting the status of LPG distribution, she said no distributor in the country has reported running out of stock. She also pointed to the increasing use of digital systems in booking and delivery processes.

"No dry out has been reported on the LPG distributorships. Around 99 per cent of the bookings are now online, and 96 per cent of the deliveries are through delivery authentication code," she said.

The ministry said that over the last three days, 1.43 crore LPG cylinders were delivered against bookings of 1.5 crore cylinders.

On the piped natural gas (PNG) front, the government reported progress in network expansion. Since March 2026, around 8.82 lakh PNG connections have been gasified, while infrastructure has been created for another 2.98 lakh connections, taking the total to 11.80 lakh.

Sharma said more than 80,400 PNG consumers had surrendered their LPG connections as of June 3.

Meanwhile, energy supplies across the world continue to face disruptions even as the Middle East chaos has continued to range on beyond the three month mark. The conflict began back on February 28, when US and Israel launched joint strikes on Iran. After the attack, Iran squeezed the Strait of Hormuz, straining 20% of the world's fuel supplies.

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