New Delhi, April 29: India’s LPG under-recoveries are expected to rise sharply and could reach nearly ₹80,000 crore in FY2027, driven by volatility in global energy markets and ongoing disruptions in West Asia, according to a recent assessment by ICRA.
The report notes that geopolitical tensions in key oil and gas-producing regions have tightened global supply conditions, leading to higher import costs for liquefied petroleum gas (LPG). This is expected to widen the gap between import prices and regulated domestic retail prices.
Under-recoveries occur when fuel retailers sell LPG at government-controlled prices that are lower than their actual procurement cost. When international prices rise, the financial burden on oil marketing companies increases.
ICRA highlighted that continued instability in global energy supply chains may keep LPG pricing under pressure in the medium term, especially if crude oil prices remain elevated.
Despite global uncertainties, domestic LPG demand in India remains steady, supported by household consumption and policy measures aimed at ensuring affordable access to clean cooking fuel.
Analysts said future trends in LPG under-recoveries will depend on global crude movements, geopolitical developments, and adjustments in domestic pricing mechanisms.
Overall, the outlook indicates continued fiscal pressure in the energy sector, with LPG cost gaps likely to remain a key concern for policymakers.
