The steep increase of ₹993 in commercial LPG cylinder prices, along with the possibility of a rise in petrol and diesel prices in the coming days, has deepened concerns across all sectors. In the national capital, Delhi, the price of a commercial cylinder has crossed ₹3000, which cannot be ignored.
Despite the serious crisis arising from the war in West Asia, petrol and diesel prices have been held steady for the past two months, and the government is making every possible effort to find alternative supply routes. To minimize the burden of inflation on the common people, the price of domestic cooking gas has not been increased.
Due to the war involving the United States, Israel, and Iran, global conditions have worsened, disrupting the supply of essential daily-use goods and making an inflationary shock inevitable. International companies have also increased the prices of aviation fuel and bulk diesel. The disruption in LPG supply from West Asia has led to a sharp rise in global LPG prices.
Despite increasing LPG production by refining companies and importing cargo from countries like the US and Australia, the losses of marketing companies on domestic LPG sales remain high. If the current level of losses continues throughout the financial year, government oil marketing companies could incur losses of around ₹80,000 crore on LPG sales.
Globally, crude oil prices are rising above $125 per barrel. It is estimated that there is a loss of ₹14 per liter on petrol and ₹18 per liter on diesel sales. The fertilizer sector is also facing significant cost pressures due to rising prices of sulfur and ammonia.
The sharp increase in commercial gas prices has created serious problems for restaurants, dhabas, food service providers, bakeries, and cloud kitchens. Street food vendors are facing the worst crisis. The street food network is vast and feeds millions of Indians daily. Small businesses lack the resources to absorb prolonged cost shocks. Due to the gas crisis, restaurant owners are already struggling, and many have temporarily shut down their operations. The condition of roadside vendors is even worse.
The central government is trying its best to ensure uninterrupted gas supply, but for consumers, almost every item has become ₹5 to ₹10 more expensive.
In India, middle- and lower-income groups tend to reduce demand during inflationary periods. This impacts vegetable sellers, dairy vendors, and other food-related businesses. When small businesses are affected, employment for those working in them is also impacted.
Regarding petrol and diesel prices, some countries have already increased retail prices. The central government has reduced excise duty on petrol and diesel to protect oil companies. However, if the conflict between the US and Iran escalates again, raising prices may become unavoidable.
In some Asian and other countries, tax structures are designed in such a way that when global oil prices rise, excise duties are reduced proportionately. When crude oil prices fall, excise duties are increased. This helps shield consumers from price shocks. Under current conditions, it has become essential to make excise policies more stable and predictable.
India currently has petrol reserves for about 60 days. Initially, there was hope that the war would end quickly and oil companies could manage the situation with past profits. However, as the crisis appears prolonged, a surge in petrol and diesel prices may occur.
The government is already bearing the burden of LPG and fertilizer subsidies. Continuing to absorb losses on petrol and diesel could put further pressure on the exchequer. The Finance Ministry’s monthly report has expressed several concerns. It suggests that governments should not limit themselves to oil and gas reserves but should also build reserves of critical raw materials.
During crises, it is often observed that some countries use their dominance in the production of essential raw materials as a strategic tool. According to the report, disruptions in the supply chain have pushed the price of imported urea to $950 per ton, up from $390 per ton in April last year. Imported ammonia prices have reached $775 per ton, compared to $365 last year. Chip prices have increased 560 times compared to the previous year.
According to the World Economic Outlook, global growth for 2026 was earlier projected at 3.4%, which was revised to 3.1% in March and is now expected to be around 2.5%. Meanwhile, domestic growth in India is expected to remain between 5.4% and 6.0%.
India cannot remain unaffected by these global developments. However, the Finance Ministry report also states that the fundamentals of the domestic economy remain strong, which should help maintain growth.
At present, the inflation story has deepened significantly, and consumer behavior is changing rapidly. India has faced major crises before, but now the impact of widespread inflation is directly affecting people’s food and daily needs. A large section of the population is struggling with livelihood and employment, which remains a serious challenge.
