Indian households and businesses are grappling with updated fuel prices as LPG, CNG, and PNG rates came into effect on May 20. The latest adjustments follow a series of hikes in petrol and diesel prices, reflecting the volatile global energy market and its impact on domestic consumers.
Recent Fuel Price Hikes and Their Causes
The past week has seen significant increases in fuel costs. CNG prices in Delhi rose by a total of Rs 3 per kilogram, with a Rs 2 hike followed by an additional Re 1 increase. Simultaneously, petrol and diesel prices were raised twice, initially by Rs 3 per litre each, and then by a further 90 paise per litre.
These hikes are primarily attributed to a surge in global crude oil prices, exacerbated by ongoing conflict in West Asia and the strategic blockade of the Strait of Hormuz. This vital shipping route handles a substantial portion of global oil and gas shipments, making India, a major energy importer, particularly vulnerable to supply disruptions and price volatility.
Fuel retailers have been facing considerable losses, and these calibrated price increases aim to partly alleviate margin pressure on oil companies. However, industry sources indicate that despite these adjustments, the increases are expected to have some inflationary impact on the economy.
LPG Cylinder Prices on May 20
Domestic LPG (14.2 kg cylinder)
- Delhi: ₹913
- Bengaluru: ₹915.50
- Hyderabad: ₹965
- Mumbai: ₹912.50
- Chennai: ₹928.50
- Kolkata: ₹939
Commercial LPG (19 kg cylinder)
- Delhi: ₹3,071.50
- Bengaluru: ₹3,152
- Hyderabad: ₹3,315
- Mumbai: ₹3,024
- Chennai: ₹3,237
- Kolkata: ₹3,202
CNG and PNG Rates on May 20
CNG Prices (per kg)
- Delhi: ₹80.09
- Bengaluru: ₹90
- Hyderabad: ₹97
- Mumbai: ₹83
- Chennai: ₹91.50
- Kolkata: ₹93.50
PNG Prices (per SCM - Standard Cubic Metre)
- Delhi: ₹47.90
- Bengaluru: ₹52
- Hyderabad: ₹51
- Mumbai: ₹50
- Chennai: ₹50
- Kolkata: ₹50
Context and Government Response
The latest fuel price adjustments occurred 16 days after Assembly elections concluded in Assam, Kerala, Tamil Nadu, and West Bengal. Prices had remained unchanged during the polling period, despite a sharp rise in international oil prices. The domestic cooking gas LPG saw a significant hike of Rs 60 per cylinder in March, yet oil companies continue to incur substantial losses.
According to Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, the recent fuel price hikes have reduced losses by a fourth, but oil companies are still facing daily losses of approximately Rs 750 crore.
Amid tightening supply and the inevitability of further price increases, Prime Minister Narendra Modi has urged citizens to use fuel judiciously. He called for reduced consumption, increased use of public transport, greater adoption of work-from-home options, and efforts to conserve foreign exchange. Additionally, the Prime Minister advised deferring gold purchases and postponing foreign travel for a year to support the national economy.