India Increases LPG Prices and Petrol and Diesel Excise Duty to Counteract ₹413 Billion Revenue Shortfalls

India's Oil Minister has announced a package of steps to counter the financial burden on state-run oil firms, which lost ₹413.38 billion in LPG sale revenue in FY2024/25. They are a ₹50 per cylinder increase in LPG prices and a rise in excise duty on petrol and diesel, though the latter will not be transferred to consumers.

 

LPG Price Hike:

The cost of LPG cylinders has been raised by ₹50, with immediate effect. This hike is supposed to assist state oil companies in recouping some part of the losses they face due to selling LPG at a subsidized price.

In contrast to February 2025, when the price of LPG was unchanged, this increase shows the government's approach towards achieving fiscal sustainability alongside affordability.

 

Excise Duty Hike:

Excise on petrol and diesel has been increased, but the Oil Minister explained that this will not find its way to consumer prices as the government intends to take the additional tax burden on itself.

This action is intended to raise revenue without adding to inflationary pressure on consumers.

 

Revenue Losses:

Oil companies' state-owned entities suffered ₹413.38 billion in FY2024/25 losses from subsidized LPG prices, which highlights the necessity of corrective action.

 

Leadership Insights:

The Oil Minister explained:

"These measures are critical to maintaining the financial health of state oil companies and stable fuel prices for consumers."

 

Outlook:

India will balance fiscal recovery with consumer protection with these measures, ensuring that there is no disruption in the supply of critical fuels.

 

Conclusion:

India's aggressive move is an indication of its resolve to meet economic challenges while protecting consumer interests.

 

Sources: Economic Times; April 7, 2025