Who Set LPG Gas Cylinder Prices In India, Central Govt. or State Govt?

Who Controls LPG Price In India?

The Indian government has complete control over the price of LPG, and state-owned oil companies set the price of LPG in India. The country’s government puts the cost every month, changing every month. An LPG connection is usually found in almost all Indian homes, and most people use it for cooking at home.

It would not be suitable for everyone else if LPG prices went up because they have to pay for the rising fuel costs in the current market. The best part is that the Indian government now gives customers who buy home LPG cylinders through its distribution network a discount.

Subsidy money is sent to an individual’s bank account when they buy the cylinder, and it is sent by electronic transfer. The amount of the subsidy changes from month to month because of changes in LPG prices worldwide and changes in the foreign currency rate.

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An Indian method called Import Parity Pricing is used to change the price of LPG (IPP). Standard practice is to change the price of LPG cylinders once a month; most people do. Most of the time, prices vary on the first day of the month.

Who Set LPG Gas Cylinder Prices In India, Central Govt. or State Govt

Why is LPG Gas So Expensive?

Prices for LPG are set by the price of crude oil on the world’s market. The cost of LPG will go up if crude oil goes up.

As a result of the COVID-19 virus spreading, the oil and gas industry has had a terrible year. Refineries were able to deal with significant changes in demand without closing for even a single day.

Gasoline retailing (including LPG distribution to more than 250 million people) stayed the same during the crisis.

To figure out how much LPG costs in India, look at the International Petroleum Price (IPP). Things like a rise in the price of LPG on the international market or the value of the Indian rupee could change how much LPG costs.

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If you buy a long-term contract from Saudi Aramco, the price went up to $20 in March, and this is because the contract was worth $625 per metric tonne.

In March, the cost of butane went up by $10 per metric tonne to $595 per metric tonne. Propane prices had gone up 171 percent since May 2020, when they were at $230 per metric tonne, and butane prices were at $240. Butane prices have gone up 148%.

These price rises are being caused by global factors, with the cost of crude oil and petroleum products worldwide going up.

How is LPG Price Determined?

Because the price of LPG can change worldwide, we make calculations based on how much it costs to buy LPG on the other side of the world. India uses IPP because it imports a lot of its food and other goods.

It is based on the price of LPG sold by Saudi Aramco, the world’s biggest producer and exporter of LPG. The IPP is based on this price. Costs such as the free on board (FOB) price, ocean freight charges, customs taxes, port fees, and insurance costs are all part of the price.

LPG’s worldwide pricing is determined by its primary raw ingredient, crude oil. People then figure out how much Indian rupees the price in US dollars is worth.

The government also runs programs like the Pradhan Mantri Ujjwala Yojana, which gives low-income women unrestrained LPG cylinders.

Gas Tax By State Government.

Because LPG cylinders are imported, they are subject to a 5% GST rate (CGST – 2.5 percent + SGST – 2.5 percent). Both the federal and state governments do not levy a separate tax on LPG cylinders.

LPG cylinders are generally subject to the 5 percent Good and Services Tax (GST), with the federal government and state each levying a 2.5 percent tax on them. In addition, beginning in 2019, the dealer commission on LPG sales would be explicitly capped to Rs 61.84 for every cylinder sold.


Extra services such as the obligatory gas inspection, installation, and administrative charges involved with acquiring new LPG connections or getting an additional cylinder, among other things, will be subject to an 18 percent GST throughout the country.

Who Provides LPG Gas In India?

All LPG cylinders are acquired from three government-owned gas companies: Bharat Gas (BPCL), HP Gas (HPCL), and Indane Gas (IDG) (IOC). These three networks employ their enormous distribution networks of distributorships to provide LPG to homes throughout the country.

Frequently Asked Questions.

Is LPG under the central government?

In India, most LPG is imported, and the federal government subsidizes it for Indian individuals and businesses.

Will the government stop LPG subsidy?

The central government has decided to discontinue the direct LPG subsidy as of May 2020.

What is the current cooking gas price in India?

The rates are updated once a month and now stand at Rs.959.50 per unit.

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