LPG price raised by Rs 50, CNG by Re 1/kg; excise duty hiked on petrol, diesel by Rs 2/litre

New Delhi: Households across the country will now shell out more for cooking gas and compressed natural gas, as the government on Monday implemented a Rs 50 hike in LPG cylinder prices and increased CNG rates by Re 1 per kg.

Simultaneously, taxes on petrol and diesel have also been revised upward by Rs 2 per litre, a move aimed at compensating for the mounting revenue losses faced by oil companies. However, the Centre announced that an excise duty hike of Rs 2 per litre on both petrol and diesel will not lead to an increase in retail prices for consumers.

“The hike in excise will be offset against the price reduction that should have happened due to falling global crude oil rates,” a senior Finance Ministry official said.

The decision comes amid a sharp drop in international oil prices, which have fallen to their lowest levels since April 2021. Brent crude slipped to $63.15 per barrel, while U.S. West Texas Intermediate futures dropped to $59.57. India meets nearly 85 per cent of its crude oil requirements through imports, making domestic pricing sensitive to global trends.

Petrol and diesel currently retail at Rs 94.77 and Rs 87.67 per litre, respectively, in the national Capital.

The latest changes in prices of LPG took effect on April 8 and apply across all consumer categories, including beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) as well as general LPG users.

For Ujjwala households, the price of a 14.2-kg LPG cylinder in Delhi has increased from Rs 503 to Rs 553. General consumers will now pay Rs 853 for the same.

“This revision is necessitated due to the steep rise in input costs,” Union Petroleum and Natural Gas Minister Hardeep Singh Puri said. It has been cleared by the ministry that the current hike is supposed to assist the government in saving Rs 16,000 crore during the financial year 2023-24 in order to balance an early expenditure of Rs 338 crore.

Prices of LPG vary from state to state based on local taxes. The last major revision occurred in March 2023, when prices were reduced by Rs 100.

CNG users, too, will face a price increase following a hike in input natural gas prices. Indraprastha Gas Ltd (IGL), the city gas distributor, announced that CNG will now cost Rs 75.09 per kg in Delhi. The upward revision follows a 4 per cent increase in input natural gas rates—from $6.50 to $6.75 per million British thermal units (mmBtu).

Puri explained that the increase in domestic LPG prices comes after oil marketing companies (OMCs) incurred losses amounting to Rs 41,338 crore in the financial year that ended March 2025.

These losses stemmed from selling LPG below cost. He cited the international benchmark for LPG, the Saudi Contract Price (CP), which rose from $385 per tonne in July 2023 to $629 in February 2025—an increase of 63 per cent.“The price of LPG in Delhi should be Rs 1,028.50 per 14.2-kg cylinder based on current import costs. However, public sector OMCs have been absorbing part of the cost burden,” Puri noted.

While the latest Rs 50 hike aims to cover the cost going forward, the ministry will seek financial support from the finance ministry to address previous under-recoveries.

“It is our commitment to make good their losses,” the minister said, suggesting that the additional revenue of Rs 32,000 crore expected from the revised excise duties on petrol and diesel could be redirected towards oil firms.

Indian Oil Corporation (IOC) posted on social media platform X saying, “The #ExciseDuty increase of Rs 2 per litre on #petrol and #diesel will not be passed on to the consumers. The collected amount may be utilised towards under-recovery of #LPG, providing relief to Oil Marketing Companies.”

The government’s official notification on the revised excise duty rates stated that the new rates “shall come into force on the 8th day of April 2025.”

The Special Additional Excise Duty (SAED) on petrol has been increased from Rs 11 to Rs 13 per litre, while that on diesel has gone up from Rs 8 to Rs 10.With these changes, the total central tax burden on petrol now stands at Rs 21.90 per litre and Rs 17.80 on diesel. These figures include basic excise, SAED, agriculture infrastructure cess, and road and infrastructure cess.

Puri said the pricing decisions would be reviewed monthly. “If there is softening in international prices, the benefit will be passed on to consumers,” he added.

The cost of cooking a day’s meals using LPG is now estimated at Rs 6.10 for Ujjwala beneficiaries and Rs 14.58 for general users, according to government calculations.

During the previous decade, the government had frequently adjusted excise duties in response to global oil market fluctuations. Between November 2014 and January 2016, excise duties were raised nine times as international crude prices dipped. The duty on petrol rose by Rs 11.77 per litre and that on diesel by Rs 13.47 per litre during that period, contributing to a substantial rise in the government’s excise collections—from Rs 99,000 crore in 2014-15 to Rs 2.42 lakh crore in 2016-17.

While there were brief periods of excise duty cuts, such as in October 2017 and October 2018, the government also resorted to duty hikes in subsequent years—including in July 2019 and during the early phase of the COVID-19 pandemic in 2020.

More recently, just before the general elections last year, petrol and diesel prices were trimmed by Rs 2 per litre each, offering some relief to consumers.

The oil ministry reiterated in a statement, “PSU Oil Marketing Companies have informed that there will be no increase in retail prices of #Petrol and #Diesel, subsequent to the increase effected in Excise Duty Rates today.”

Meanwhile, the Centre stated that this measured move, which is considered responsible and consumer-centric, is made at a time when domestic expenses are still being driven by volatility in the global economy.

The minister asserted that the government’s approach demonstrates a cautious balancing act between consumer protection and the financial stability of energy companies. He hinted at the possibility of future price reductions if global trends remain favourable, considering that crude oil prices have stabilised at around $60 per barrel.

Puri clarified that although the increase in excise tax is intended to increase government revenue, especially given the current budgetary climate, it was imperative to make sure that the public would not experience immediate hardship as a result.

The action, as observed, amounts to a precarious balancing act between the Centre’s budgetary goals and the real-world situation confronting Indian consumers.