LPG cylinder prices have experienced significant increases in May 2026, with 19 kg cylinders witnessing the biggest hike ever by ₹993 to ₹3,071.50 across metro cities from May 1st. According to reports from Goodreturns, this increase was attributed to the intensifying situation in the West Asian war. Additionally, Indian Oil raised the price of 5 kg FTL (Free trade LPG) by ₹261 for May 2026, with sales for 5 kg cylinders scaled up since the Middle East conflict for migrants, students and others. The 19 kg commercial LPG cylinder prices have risen by ₹993, taking the cost in Delhi to ₹3,071.50, while the 5 kg free trade LPG cylinder has also been hiked by ₹261.
India's state fuel companies face massive financial pressure as Brent crude oil prices trade around $109 per barrel, worsened by geopolitical tensions and disrupted supply routes through the Strait of Hormuz. Rating agency ICRA estimates these companies are facing marketing losses of about ₹14 per litre on petrol and ₹18 per litre on diesel. For every $1 per barrel increase in crude prices, these losses increase by about 60 paise per litre, assuming stable retail prices. The pressure extends to LPG, with ICRA projecting losses around ₹80,000 crore for FY27 if current trends continue. Despite the current margin squeeze, India's major OMCs—Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL)—exhibit characteristics of value stocks with low P/E ratios and market capitalizations around ₹200,804 crore for IOCL, ₹130,350 crore for BPCL, and ₹79,921 crore for HPCL.
Reports indicate that oil marketing companies may hike domestic commercial LPG cylinders of 14.2 kg in the coming days. As reported by India Today, petrol and diesel prices may increase by around ₹4-5 per litre, while domestic LPG cylinders could see a hike of about ₹40-50. This would be the first increase in petrol and diesel prices in nearly four years, with retail rates largely frozen since 2022. Government sources indicate a potential hike of up to ₹5 per litre for petrol and diesel soon, as retailers aim to recover losses from the ongoing West Asian conflict. However, officials have repeatedly denied immediate plans for price hikes, calling market rumors 'fake news'.
Currently, 14.2 kg LPG prices remain unchanged for the second consecutive month after OMCs hiked this price by ₹60 across metro cities on March 7, 2026, which was the first increase since April 2025. According to Goodreturns, current pricing shows ₹913 per cylinder in Delhi, ₹939 in Kolkata, ₹912.5 in Mumbai and ₹928.5 in Chennai. The 14.2 kg cylinder represents the most used cooking gas by Indian households, while 19 kg cylinders are widely used by restaurants and industrial purposes.
The government's reluctance to hike fuel prices is tied to India's overall economic goals, with inflation currently at 3.4% for March 2026. EY projects that if the Indian crude basket averages $120 per barrel in FY27, inflation could surge to 6%, well above the Reserve Bank of India's 2-6% target. A fuel price increase could cause transport and food costs to rise, potentially boosting inflation and slowing GDP growth. The government faces pressure to manage its budget deficit and inflation, making a large fuel price increase a difficult policy choice. Government officials have publicly questioned claims of 'massive losses', suggesting that reported losses might be overstated due to crack spread changes, indicating price increases might not happen soon or be as large as companies want.
