LPG losses ease as Saudi price cuts offer breather to Indian refiners

Saudi price cuts ease India’s LPG losses: Indian state-run refiners are set to record their lowest losses on household liquefied petroleum gas (LPG) sales in over two years after Saudi Aramco slashed benchmark propane and butane prices to USD 475 and USD 460 a tonne, Business Standard reports, citing unnamed Aramco analysts. This is a reduction of USD 20 and USD 15 from October prices. The drop has reduced per-cylinder losses to about INR 20 (USD 0.24) — a fraction of the INR 200 (USD 2.40) they were losing a year ago.

Why this matters? For IndianOil, Bharat Petroleum, and Hindustan Petroleum, which together supply LPG to 330 mn households, the easing comes as a relief. The government earlier approved INR 300 bn (USD 3.3 bn) in compensation for LPG-incurred losses from last year, when refiners absorbed about INR 40 bn (USD 480 mn) to keep prices affordable.

Lower Saudi prices have also boosted Indian LPG imports, up 7% y-o-y to 19.7 mn tonnes in April-October, with US shipments rising sharply. Crude oil is expected to stabilize near USD 65 per barrel, which could keep refiners’ LPG losses contained through FY26.

Context: Saudi Arabian prices remain crucial because India imports about 60% of its LPG. While the UAE is India’s largest supplier, Saudi prices impact the regional pricing. India imported some 19 mn tonnes of gas between January-October, the business daily adds, citing Kpler data.

REMEMBER- India heavily subsidizes household LPG, and maintains a targeted subsidy of INR 300 (USD 3.42) per 14.2 kg cylinder for low-income households under the PM Ujjwala scheme — which currently provides free LPG connections and subsidized refills to 105.8 mn Indian households — to promote clean cooking fuel use, as per government data.