As the new year dawns, Indian households and businesses face an unwelcome surprise: a sharp hike in the price of Liquefied Petroleum Gas (LPG). On January 1, 2026, oil marketing companies have raised the price of 19-kg commercial LPG cylinders by ₹111 in major cities. While the rates for 14-kg domestic LPG cylinders remain unchanged, the increase in commercial cylinder prices is set to impact businesses across the country.
Impact on Consumers and Businesses
The increase in LPG prices will primarily affect commercial entities such as hotels, restaurants, and small businesses that rely on LPG for their daily operations. The rise in operational costs could potentially lead to increased prices for consumers, exacerbating inflationary pressures.
For domestic consumers, the price of a 14.2 kg LPG cylinder remains unchanged. However, it's important to note that domestic LPG prices have seen a gradual increase over the past year. For example, in Mumbai, the price has remained steady at ₹852.50 since April 2025, but there has been an increase of ₹50 from February 2025 to January 2026.
City-Wise Rates
Here's a look at the new prices for commercial LPG cylinders in major cities:
- Delhi: ₹1691.50 (increased by ₹111)
- Mumbai: ₹1642.50 (increased by ₹111)
- Kolkata: ₹1795 (increased by ₹111)
- Chennai: ₹1849.50 (increased by ₹111)
Factors Influencing LPG Prices
LPG prices in India are determined by state-run oil companies and are revised on a monthly basis. These prices are influenced by several factors, including:
- International Contract Prices: The international contract price of LPG for the month.
- Exchange Rates: Fluctuations in the foreign exchange rate can impact the cost of importing LPG.
- Taxes and Transportation Costs: Local taxes, transportation charges, and supply logistics contribute to price variations across different states.
Government Subsidies
The Indian government currently provides subsidies on the sale of domestic LPG cylinders to consumers. The subsidy amount is directly credited to the individual's bank account after the purchase of the cylinder. However, the subsidy amount varies every month and depends on changes in the average international benchmark LPG prices and the foreign exchange rate.
Auto-LPG Prices
In related news, the Electrical and Mechanical Services Department (EMSD) announced an adjustment to the auto-LPG ceiling prices for dedicated LPG filling stations from January 1 to January 31, 2026. The adjusted auto-LPG ceiling prices will range from $3.15 to $4.07 per litre, an increase of $0.10 to $0.11 per litre.
Conclusion
The LPG price hike comes as a shock to businesses at the start of the new year. While domestic cylinder prices remain unchanged, the increase in commercial LPG rates is likely to have a cascading effect on the economy, potentially leading to higher prices for consumers. It remains to be seen how the government will respond to mitigate the impact of this price hike on businesses and households.
