India Raises LPG Prices, Nepal Likely to Feel the Impact

The price of domestic LPG gas cylinders in India has been increased by 29 Indian rupees. Indian media reports state that the new price came into effect from Sunday.

The price hike in India is expected to increase pressure for price adjustments in Nepal as well, since Nepal imports all of its LPG gas from India.

According to the revised rate, the price of a 14.2-kilogram domestic LPG cylinder in New Delhi has risen from 913 Indian rupees to 942 Indian rupees. Earlier, on March 7, prices had also been increased by 50 rupees per cylinder due to fluctuations in the international energy market and disruptions in the supply chain.

In Nepal, LPG prices are adjusted monthly by the Nepal Oil Corporation based on the updated purchase rates provided by the Indian Oil Corporation (IOC). Since the price increase in India could raise Nepal’s import costs in the upcoming pricing cycle, the possibility of an automatic adjustment in the Nepali market has also increased.

However, whether prices in Nepal will rise or not depends on several factors, including the new pricing list sent by IOC, transportation costs, exchange rates, and the corporation’s overall profit and loss situation. According to energy experts, if LPG prices remain high in the international market, the financial burden on Nepal Oil Corporation could increase. If the corporation is unable to manage the losses, consumers may also have to bear the impact of higher prices.

Meanwhile, Sujata Sharma, Joint Secretary at India’s Ministry of Petroleum and Natural Gas, said that the government has adopted measures such as increasing domestic production and expanding imports when necessary to ensure an adequate supply of household LPG gas.

According to her, despite the government subsidy on domestic LPG cylinders, there is still an “under-recovery” of around 700 Indian rupees per cylinder. She added that declining gas consumption in the commercial and industrial sectors, improvements in the booking cycle, and the effective implementation of the Delivery Authentication Code (DAC) system have helped manage demand more efficiently.

As LPG remains the primary cooking fuel in Nepal, any price changes in India directly affect Nepali consumers and the domestic market. Therefore, both Nepal Oil Corporation and consumers are closely watching the upcoming pricing list from Indian Oil Corporation.