LPG prices set to rise sharply! Gas companies face ₹59,000 crore loss

A startling figure has emerged: gas companies have incurred a loss of ₹59,000 crore. Let us understand how this loss occurred and when—and by how much—LPG prices are expected to rise.

Major news regarding domestic LPG cylinders has surfaced. State-owned oil companies in the country are facing mounting losses from selling LPG. By July 2026, the total "under-recovery" (loss incurred due to selling below cost) for these companies on domestic LPG had crossed the ₹59,000 crore mark. Notably, this massive loss persists despite the government providing financial assistance of approximately ₹52,000 crore. This raises the question: could domestic gas cylinders become more expensive in the near future?

How did such a huge loss occur?

State-owned oil companies are selling domestic LPG cylinders at prices lower than their actual cost. When LPG becomes expensive in the international market, the companies' procurement costs rise, yet the full burden is not immediately passed on to domestic consumers. Consequently, the gap between the selling price and the cost becomes a loss for the companies. The government does provide compensation to offset these losses; however, despite this, the total under-recovery for Oil Marketing Companies (OMCs) on domestic LPG exceeded ₹59,000 crore by July.

How much did the government contribute?

The government has stated that it provided compensation of approximately ₹52,000 crore to mitigate losses from domestic LPG sales. This includes a reimbursement of ₹22,000 crore to OMCs for the 2022-23 fiscal year (FY23). Additionally, ₹30,000 crore in compensation was allocated for FY26 and FY27. Despite this, the companies' losses have not decreased; instead, they have surpassed the ₹59,000 crore mark.

What was the subsidy amount in June?

According to government data, this gap exceeded ₹700 per cylinder in June. In July, this figure stood at approximately ₹500 per cylinder. However, in August, it dropped to around ₹188 per cylinder. This indicates that fluctuations in international LPG prices directly impact the losses incurred by Oil Marketing Companies (OMCs).

Will gas cylinders become more expensive?

The biggest question is whether gas prices will rise. As of now, there has been no new announcement regarding a hike in the price of domestic LPG cylinders. Therefore, it would be premature to say that cylinders will definitely become costlier next month or in the near future.