Planning to book a 14.2 kg LPG cylinder today? Check the rates first.

With the start of the new month, the price of a commercial LPG cylinder has increased by ₹10. This follows several previous price hikes. In contrast, the prices of domestic LPG cylinders remain completely stable.

Consumers across the country have received some relief ahead of the festive season, as there has been no change in the price of the 14.2 kg domestic LPG cylinder—a rate that has remained steady since June. Meanwhile, the price of the 19 kg commercial cylinder has been raised multiple times.

Initially, there was an increase of ₹9.50 on September 1st, followed by a hike of ₹62.50 in October, and now another ₹10 increase in November. Prior to this, prices had been reduced by ₹183.50 in July and ₹192 in August. While hikes in commercial cylinder prices do not directly impact household budgets, they do increase operating costs for businesses such as hotels, bakeries, *dhabas*, and catering services.

Why are the prices of commercial cylinders rising?

In India, LPG prices are primarily determined by the 'Saudi Contract Price,' which is announced monthly by Saudi Aramco. For November, Saudi Aramco has implemented significant price hikes: a 5.9% increase for propane (reaching $720 per tonne) and a 6.8% increase for butane (reaching $780 per tonne). Additionally, Algeria’s state-owned energy company, Sonatrach, has raised gas prices by 23% to 40%. These factors have led to an increase in input costs for Indian oil companies.

Tensions in West Asia are also a contributing factor to these price increases. India imports a large portion of its LPG requirements from Gulf countries, with approximately 90% of these supplies passing through the Strait of Hormuz. Due to escalating tensions between the United States and Iran, the risk to energy supplies moving along this maritime route is increasing. Consequently, insurance premiums for vessels and freight charges have risen significantly. Furthermore, with the festive season underway in India, there has been a sharp surge in the demand for commercial LPG cylinders from hotels, restaurants, sweet shops, and catering services. When demand rises alongside the high cost of imports, oil companies typically adjust prices to mitigate pressure on their profit margins.

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