Executive Summary:
This document addresses rising prices of domestic LPG cylinders, petrol, and diesel, responding to questions about the financial burden on households, pricing transparency, and government measures. It details the cost structure, taxes, subsidies, and the impact of international crude oil rates on domestic fuel prices as of August 1, 2025. It also outlines the government's actions to mitigate the impact of rising prices.
Key Points / Main Content:
LPG Pricing and Subsidies:
- India imports approximately 60% of its domestic LPG consumption, with prices linked to the international market (Saudi CP).
- The effective price for Pradhan Mantri Ujjwala Yojana (PMUY) consumers was reduced from Rs. 903 in August 2023 to Rs. 553 in July 2025.
- The retail selling price of a 14.2 kg domestic LPG cylinder in Delhi is Rs. 853, with a targeted subsidy of Rs. 300 for PMUY consumers, resulting in an effective price of Rs. 553.
- Details of LPG price build-up in Delhi as of August 1, 2025: Price charged to distributors (Rs. 739.30), Distributor commission (Rs. 73.08), Central GST 2.5% (Rs. 20.31), State GST 2.5% (Rs. 20.31), Retail Selling Price (Rs. 853.00).
- Subsidies on domestic LPG have varied since 2020-21.
Petrol and Diesel Pricing:
- Petrol and diesel prices are market-determined by Public Sector Oil Marketing Companies (OMCs) and linked to international market prices.
- India imports over 85% of its crude oil requirements.
- Central Excise duty was reduced by Rs. 13/litre on petrol and Rs. 16/litre on diesel in two tranches, passed on to consumers.
- In March 2024, OMCs reduced petrol and diesel prices by Rs. 2/litre.
- In April 2025, excise duty on Petrol and Diesel was increased by Rs. 2 per litre each but this was not passed on to consumers.
- Details of petrol and diesel price build-up in Delhi as of August 1, 2025, include: Price before taxes and dealer commission, Customs duty, Excise Duty, VAT, and Dealer Commission.
Government Measures:
- The government has taken steps to mitigate the impact of rising crude prices, including diversifying crude import sources, invoking Universal Service Obligation, increasing ethanol blending, augmenting domestic exploration and production, and promoting renewable energy sources.
- PSU OMCs carried out an intrastate freight rationalisation, reducing price differences in remote areas.
Impact Analysis:
Common Households:
Impact: Affected by fluctuations in LPG, petrol, and diesel prices, impacting household budgets.
Action Required: Monitor price changes and potentially adjust consumption patterns.
Pradhan Mantri Ujjwala Yojana (PMUY) Beneficiaries:
Impact: Benefit from targeted subsidies on LPG cylinders, reducing the financial burden.
Action Required: Avail of the Rs. 300 subsidy on LPG cylinders to reduce the effective price.
Public Sector Oil Marketing Companies (OMCs):
Impact: Responsible for determining petrol and diesel prices based on market conditions.
Action Required: Make appropriate pricing decisions, carry out freight rationalization, and implement government policies related to fuel pricing and distribution.
Central and State Governments:
Impact: Involved in levying taxes on petrol, diesel, and LPG, and implementing policies to manage fuel prices.
Action Required: Continue to assess and adjust tax rates as needed to balance revenue and consumer affordability, and support initiatives like ethanol blending and domestic production.
Key Entities Referenced
PETROLEUM AND NATURAL GAS: The ministry responsible for policies related to petroleum and natural gas in India.
LPG: Liquefied Petroleum Gas, a cooking gas commonly used in households.
Delhi: National Capital Territory of Delhi, where retail prices are specified in the document.
Pradhan Mantri Ujjwala Yojana (PMUY): A government scheme to provide LPG connections to women from Below Poverty Line (BPL) households.
Government of India: The Union Government of India.
Petrol: A fuel used for transportation.
Diesel: A fuel used for transportation, often in commercial vehicles.
Petroleum Planning and Analysis Cell (PPAC): An organization that collects and analyzes data on the petroleum and natural gas sector in India.
LOK SABHA
UNSTARRED QUESTION NO. 3075
TO BE ANSWERED ON 7 AUGUST, 2025
Rising Prices of Domestic LPG Cylinders, Petrol and Diesel
3075 Shri Manickam Tagore B:
पेट(cid:332)ोिलयम और (cid:366)ाकृ ितक गैस मं(cid:361)ी
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) whether the Government is aware of the financial burden on common households due to the
continuous rise in prices of domestic LPG cylinders, petrol and diesel and if so, the details
thereof;
(b) whether the Government is likely to consider placing in the public domain a detailed cost
structure and pricing formula used to determine the retail prices of cooking gas, petrol and diesel,
if so, the details thereof;
(c) whether the increase in prices of petrol and diesel is directly linked to global crude oil rates, if
so, the details thereof and if not, the other contributing factors;
(d) whether the Government has a breakup of taxes levied by the Union and State Governments,
dealer commission, transportation and profit margins included in the retail price of petrol, diesel
and LPG and if so, the details thereof; and
(e) whether the Government has reduced subsidies on domestic LPG cylinders during each of the
last five years and the amount of subsidies disbursed and if so, the details thereof?
ANSWER
पेट(cid:332)ोिलयम और (cid:366)ाकृ ितक गैस मं(cid:361)ालय म(cid:336) रा(cid:475) मं(cid:361)ी
((cid:373)ी सुरेश गोपी)
MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS
(SHRI SURESH GOPI)
(a) to (e): LPG:
India imports about 60% of the domestic LPG consumed. Price of LPG in the country is linked
to its price in the international market. While the average Saudi CP (international benchmark for
LPG pricing) rose by 51% (from US$ 385/MT in July 2023 to US$ 582/MT in June 2025), the
effective price for Pradhan Mantri Ujjwala Yojana (PMUY) consumers for domestic LPG was
reduced by 38% (from Rs. 903 in August 2023 to Rs. 553 in July 2025).
Globally, PMUY is the biggest program of its kind that provides Domestic LPG to more than 10
crore poor households at an effective price of just about Rs. 39/Kg. The retail selling price of a
14.2 Kg domestic LPG cylinder is currently Rs. 853 in Delhi. After a targeted subsidy of Rs.
300/cylinder to PMUY consumers, Government of India is providing 14.2 Kg LPG cylinders at
an effective price of Rs.553 per cylinder (in Delhi). This is available to about 10.33 crore
Ujjwala beneficiaries, across the country.The details of price build up of RSP of Domestic LPG (including taxes levied by Central and
State Government) as on 01.08.2025 at Delhi are given below:
Elements Rs./14.2 kg Cylinder
Price Charged to Distributors 739.30
Distributors Commission 73.08
Central GST @ 2.50% 20.31
State GST @ 2.50% 20.31
Retail Selling Price 853.00
Source: Petroleum Planning & Analysis Cell (PPAC)
After a targeted subsidy of Rs. 300/cylinder to PMUY consumers, Government
of India is providing 14.2 Kg LPG cylinders at an effective price of Rs.553 per
cylinder (in Delhi).
The details of subsidy on domestic LPG since 2020-21 are given below:
Financial Year Subsidy^ (Rs. in Crore)
2020-21 11896#
2021-22 1811
2022-23 6965@
2023-24 11444
2024-25 13640
Note: This includes fiscal subsidy and under-recovery to Oil Companies in domestic LPG
^ This includes expenditure on connections given under Pradhan Mantri Ujjwala Yojana (PMUY)
# This includes Pradhan Mantri Garib Kalyan Package subsidy.
@ In addition, Government paid a one-time compensation of Rs.22000 crore to OMCs for under-recoveries on the
sale of domestic LPG.
Source: Petroleum Planning and Analysis Cell (PPAC)
Petrol & Diesel:
Prices of petrol and diesel are market determined and Public Sector Oil Marketing Companies
(OMCs) take appropriate decision on pricing of petrol and diesel.
The prices of petroleum products in the country are linked to the price of respective products in
the international market. India imports more than 85% of its crude oil requirements. Crude oil
prices (Indian basket) increased from $55/bbl (March 2015) to $113/bbl (March 2022) and
further to $116/bbl (June 2022) and have continued to fluctuate due to various geopolitical and
market factors, whereas domestically, Petrol and Diesel prices have come down to Rs. 94.77 and
Rs. 87.67 per litre respectively (Delhi prices) from Rs. 110.04 and Rs. 98.42 per litre in
November 2021 as a result of various steps taken by Government and PSU OMCs.
For instance, Central Excise duty was reduced by the Central Government by a total of Rs.
13/litre and Rs. 16/litre on petrol and diesel respectively in two tranches in November 2021 and
May 2022, which was fully passed on to consumers. Some State Governments also reduced state
VAT rates to provide relief to citizens. In March, 2024, OMCs reduced the retail prices of petrol
and diesel by Rs. 2 per litre each. In April 2025, excise duty on Petrol and Diesel was increased
by Rs. 2 per litre each but this was not passed on to consumers.PSU OMCs also carried out an intra-state freight rationalisation. This has benefitted consumers
located at remote areas, far from Petroleum Oil & Lubricants (POL) Depots in the form of
reduced Petrol and Diesel prices in remote parts within the states. This initiative has also reduced
the difference between the maximum and minimum retail prices of Petrol or Diesel within a
state.
Government also took several other steps to insulate common citizens from high international
prices, which included diversifying the crude import basket, invoking the provisions of Universal
Service Obligation to ensure availability of petrol & diesel in domestic market, increasing the
blending of ethanol in petrol, etc.
The Government has taken several steps to control the impact of rising crude prices including
augmenting domestic exploration and production of crude oil, ethanol blending program,
improving the share of renewable sources in Indian energy basket etc.
The details of price build up of RSP of Petrol and Diesel (including taxes levied by Central and
State Government) as on 01.08.2025 at Delhi are given below:
Elements Petrol Diesel
Rs./ Ltr. % in RSP Rs./ Ltr. % in RSP
Price before taxes and dealer 52.09 54.97% 52.92 60.36%
commission
Customs duty 0.98 1.10
Excise Duty 21.90 17.80
Total Central Taxes 22.88 24.15% 18.90 21.55%
Price Charged to customer - Depot Price 74.98 71.81
VAT (Including VAT on dealer 15.40 12.83
commission)
Total State Taxes 15.40 16.25% 12.83 14.63%
Total Taxes 38.28 40.39% 31.72 36.19%
Dealer Commission 4.40 4.64% 3.03 3.45%
RSP per litre (Rounded up) 94.77 100.00% 87.67 100.00%
Source: Petroleum Planning and Analysis Cell (PPAC)
*****