The price of liquified petroleum gas, or LPG, have been hiked by Rs 60 per cylinder amid global energy cost fluctuations as the war in West Asia entered its eighth day.

With this, the cost of non-subsidised LPG cylinders will now cost Rs 913 per 14.2 kg cylinder in Delhi, according to prices displayed on the Indian Oil Corporation website. In Kolkata, the cylinder costs Rs 939, in Mumbai, the price is Rs 912.5 and in Chennai it is Rs 928.5.

The updated price came into effect on Saturday.

The Indian Oil Corporation, the Bharat Petroleum Corporation and the Hindustan Petroleum Corporation regulate the price of cooking gas in India.

Earlier this month, the price of commercial LPG used by establishments such as hotels and restaurants was increased by Rs 114.5 per 19 kg cylinder. It costs Rs 1,883 in Delhi.

With the latest revision, the 14.2 kg LPG cylinder is now the costliest it has been since August 2023.

The price of crude oil in international markets influences domestic LPG costs by affecting fuel costs and shaping supply decisions across energy markets.

The benchmark Brent crude price reached $87 per barrel by Saturday, marking a 20.8% increase from February 27, when it was at $72.87. The jump came after Israel and the US, on February 28, launched a joint operation to “degrade the capabilities” of the Iranian government.

Iran retaliated by striking Israel and US military bases in the region, and targeting major cities in other Gulf countries and some ships.

On Monday, Iran claimed that the Strait of Hormuz was “closed” for shipping traffic, warning that any vessel attempting to pass through the strategic waterway would be set on fire, according to reports.

The narrow waterbody connects the Gulf to the Arabian Sea. About 20% of global petroleum liquids consumption traverses the maritime chokepoint.

‘Prolonged war could raise fuel costs, weaken rupee’

The hike came a day after India’s Ministry of Finance stated that the ongoing war in West Asia has heightened geopolitical risk around the Strait of Hormuz, driving oil prices upward.

Given India’s heavy reliance on imported crude, it “could feed through into higher imported inflation by raising fuel costs and weakening the rupee, complicating the inflation outlook for India”, the ministry said in its monthly economic review for February released on Friday.

India is a net importer of oil and gas, with around 80% to 85% of its energy requirements met through imports.

The ministry stated that, despite the country’s high dependence on crude oil imports, it has “sufficient foreign exchange reserves,” a low current account deficit and low inflation.

These factors collectively enable it to mitigate the impact of rising global crude oil prices and ensure domestic energy security, it added.

“However, if the crisis persists, it could have material implications for the exchange rate and the current account deficit and could stoke inflationary pressures,” read the economic review. “Subdued capital flows, accentuated by a flight to safety, could put pressure on the currency.”

It added: “Some sectors dependent on LNG [liquified natural gas] and crude, like fertilisers and petrochemicals, could be affected if the crisis is prolonged.”

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