LPG Prices From January 1: Will 14.2KG, 19KG Cylinder Prices Rise Or Fall Next Month? Check Latest Prices Here

LPG Prices: From January 1, 2025, a host of changes will take effect including price revisions in LPG cylinders in India. Oil marketing companies such as the largest OMC, Indian Oil revise LPG prices every month. Currently, OMCs are struggling with under-recovery and accumulated losses in LPG cylinders, adding a bitter hole to their profitability. So far, the prices of 19KG cylinders have been volatile and revised every month, however, OMCs have kept the most used cooking gas namely the 14.2Kg cylinder unchanged since August 2024. Here are the latest prices of LPG cylinders in India.

LPG Prices In 19KG Cylinder:

With effect from December 1, in Delhi, the 19kg cylinder price was raised by Rs 16.5 to Rs 1,818.50 per cylinder compared to the previous month. While in the financial hub of the country, Mumbai, the 19KG LPG cylinder price was hiked by Rs 16.5 to Rs 1,771 compared to the previous month's price of Rs 1,754.50 per cylinder. Compared to metro cities like Delhi, Kolkata, and Chennai, a 19 kg LPG cylinder is cheaper in Mumbai despite the latest hike.

Further, in Chennai, 19KG LPG price was increased by Rs 16 to Rs 1,980.50 per cylinder compared to Rs 1,964.50 per cylinder. Moreover, in Kolkata, the price of a 19 kg cylinder was increased by Rs 15.5 to Rs 1,927 per cylinder compared to Rs 1,911.50 per cylinder.

Notably, the prices of LPG cylinders in 19kg have been increased for the fifth consecutive month now. From July to December 2024, 19Kg LPG cylinder prices are up by Rs 172.5 in Delhi, higher by Rs 171 in Kolkata, up by Rs 173 in Mumbai and also higher by Rs 171 in Chennai.

The last time LPG prices in 19Kg were reduced was in June 2024, and at that time, this cooking gas was available at Rs 1646 in Delhi, at Rs 1756 in Kolkata, at Rs 1598 in Mumbai, and Rs 1809.50 in Chennai.

LPG Prices In 14.2KG Cylinder:

Notably, leading OMCs have LPG prices in 14.2kg cylinders unchanged since August 1, 2024. In December 2024 as well, the 14.2 kg cylinder price is at Rs 803 in Delhi, Rs 829 in Kolkata, Rs 802.50 in Mumbai, and Rs 818.50 in Chennai.

LPG Sales And Impact On OMCs:

According to ICICI Securities, H1FY25 results for the three Oil Marketing Companies (OMCs) - IOCL, BPCL and HPCL - were less than stellar with accumulated LPG losses, weaker GRMs and inventory losses dragging down earnings sharply vs. H1FY24's high base.

The brokerage highlighted that the past few months have seen a lot of volatility around crude prices, GRMs and even in marketing margins (the trend, albeit, has been up for marketing margins). Coupled with LPG losses and inventory impact denting Q2 results, stocks of the three OMCs have taken a hit over the last three months, declining 23.7/19.1/14% for IOCL/BPCL/HPCL.

Also, these OMCs' marketing earnings dipped due to inventory losses and accumulated under-recovery on LPG sales where product prices have fallen below realised prices from customers.

ICICI Securities expects LPG losses of Rs 175 billion in H1 to be replicated in H2 but shall be in line with previous years. That is why, the brokerage believes that there are enough reasons to warrant optimism around H2FY25 prospects for the OMCs, despite the potential INR 300-330bn of under-recovery losses related to LPG over FY25E (aggregate INR 175bn loss in H1FY25).

It also believes the probability of at least partial LPG compensation coming through by end-FY25E is reasonably high, given previous years' trends.

That being said, it will be keenly watched if OMCs continue to hike LPG prices of 19KG cylinders in January 2025 as well, or if is there a reverse in trend expected. Notably, the impact of the price revision will further be gauged.

Also, the upcoming Budget 2025 is expected to bring about relief in taxes on petroleum products. The industry body CII has recommenced trimming the excise duty on fuel products for driving consumption for lower income class families. The reason behind the suggestion is that fuel prices have significantly drove inflation.

At present, Indian Oil-backed Indane LPG is sold and delivered in eight different pack sizes. The 5 kg and 14.2 kg cylinders are largely meant for domestic use and comprise almost 90% of all gas distributed, while the 19 kg, 47.5 kg and 425 kg Jumbo cylinders are marketed for industrial and commercial consumption.