Fuel costs for migrant workers, community kitchens, canteens, roadside dhaba and industrial users rose by more than 47% on Friday as state-run oil companies hiked commercial LPG prices by 47% on Friday. $993 per 19 kg pack $261.50 per 5 kg drum.
Public sector oil marketing companies have also raised aviation turbine fuel prices for foreign airlines effective May 1. The ATF for international carriers was raised by $76.55 per kiloliter to $1,511.86 per KL, an increase of 5.3%. Wholesale diesel prices rose by 8.75% from $137 per litre $149 for wholesale buyers including railways, government roads, telecom towers, infrastructure, construction, mining and agriculture sectors. Diesel is not sold in bulk at retail pumps.
The 19kg commercial LPG cylinder – used by hotels, refuges, canteens and industrial kitchens – is now costing $3,071.50, up from $2,078.50. The 5kg free trade LPG cylinder, primarily used by migrant workers and students living near educational institutions, has jumped from $549 l $810.50.
The price changes put the focus back on energy costs amid concerns that higher gas prices could be a precursor to increases in petrol and diesel prices – a move denied by the government that was under consideration until Tuesday.
At least three industry experts, citing uncertain global energy supplies and price volatility since the outbreak of the West Asian war on February 28, said the commercial LPG user base is not homogeneous – and that not all of them can absorb a price shock or pass it on to customers.
Most affected are migrant workers, who may return to their villages where firewood is much cheaper than the 5-kg cylinders that many are already buying on the black market at higher prices. “There may be a reverse migration if the cost of fuel does not make economic sense for them, which will negatively impact construction and manufacturing. At least in their village, they have MGNREGA guarantee,” said one of them, who requested anonymity.
On the ground, workers HT spoke to supported this possibility. Chandan Poddar, a 25-year-old painter who shares a rented room in Prem Nagar in northwest Delhi with nine other migrant workers, said his group already spends nearly… $3,000 collectively on 5kg drums every month – and the recent increase has crushed the entire economy. “It seems we are forced to return to our villages,” he said. “We are paid daily wages and cannot afford to waste an entire day trying to refill the small cylinder every few days.”
In Sarojini Nagar, 21-year-old Sumit Chaudhary, who runs a momo stall, said black market prices for a 5-kg cylinder have already gone up from $100 per kilogram before the shortage $Now 350-400 He said: “We do not have the option of increasing prices, because customers will simply choose not to come here. I am afraid we may have to stop running the kiosk.”
State-run Indian Oil Corporation, India’s largest fuel retailer, said on Friday that LPG prices for domestic consumers – more than 330 million household kitchens – have not been raised. “In general, nearly 80% of petroleum products saw no change in prices, including regular gasoline and diesel, ensuring stability for the majority of consumers,” she said. It said the price adjustments were limited to bulk and commercial LPG cylinders, bulk diesel, and international ATF, categories that together constitute less than 1% of total consumption and are subject to monthly review in accordance with international standards.
Petroleum Minister Hardeep Singh Puri, while speaking at the vibrant Gujarat Regional Congress in Surat, defended oil and gas companies. “When crude oil prices rose sharply, our oil marketing companies charged lower recovery amounts and protected consumers. We kept the kitchen fire in kitchens worth Rs 33 lakh crore burning through thoughtful allocation,” he said. He added that despite the huge fluctuations in crude oil prices over the past four years, and their rise by more than 50% in the past 60 days due to the closure of the Strait of Hormuz, retail prices of gasoline and diesel have not been raised.
Global oil prices rose from $72.87 per barrel before the outbreak of the West Asian war to $110.40 on Thursday – an increase of more than 51.5%. Brent crude oil was trading at $107.31 per barrel on Friday evening. India is the third largest consumer of crude oil in the world after the United States and China, importing more than 88% of the crude oil it processes.
Crude oil markets swung sharply on Friday after Iran sent a new negotiation proposal to US brokers via Pakistan, sending Brent crude futures falling from a high of $126.41 a barrel on Thursday – the highest since March 2022 – to $108.78 by the evening. “This Iranian proposal has given the market hope that there is a way beyond the United States,” said Phil Flynn, senior analyst at Price Futures Group.
However, both benchmarks remained on track for weekly gains, with Tehran continuing to close the Strait of Hormuz and the US Navy intercepting Iranian crude exports – with no permanent end to the conflict in sight.
(With inputs from Snehil Sinha and Aditya Khatwani)
