LPG and ATF Prices Record Significant Under-Recovery

Government Faces Under-Recovery Challenges Amid Rising Oil Prices

The state-run oil marketing companies (OMCs) are currently facing significant under-recovery challenges on domestic LPG sales, with a loss of Rs 650 a cylinder. This is a consequence of rising international prices, a senior government official stated on June 1.

The under-recovery on the sale of aviation turbine fuel (ATF) or jet fuel stands at Rs 30 a litre, which is variable based on international prices. Despite the challenges, the country's LPG consumption has seen a reduction due to demand management measures implemented by the government. In contrast, petrol and diesel consumption has remained unchanged.

OMCs recently raised the price of the 19-kg commercial LPG by Rs 42 a cylinder, but left domestic cooking gas prices unchanged. The price hike comes as the government revised export levies on petrol, diesel, and aviation turbine fuel (ATF) for the fortnight beginning June 1 to ensure adequate domestic availability amid uncertainties stemming from the Iran war.

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ATF prices for international airlines were, however, slashed by 27 percent in a monthly revision, while it remained unchanged for domestic airlines.

In a separate update, the country achieved a record foodgrain production at 3,766 lakh metric tonnes (LMT) in FY26. The estimated production of pulses also stood at 274 LMT in FY26, up 7 percent from FY25. This increase in production has an immediate impact on imports, and India holds a 43 LMT buffer stock of pulses in FY26, more than the last two years.

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The country holds 513 LMT of wheat stocks as against the buffer norms of 275 LMT (as on July 1). Rice stocks also remain sufficient at 397 LMT against buffer norms of 135 LMT. The government maintains comfortable food stocks, with sugar availability remaining adequate.

The statements came a few days after the India Meteorological Department (IMD) lowered its "below normal" forecast for the southwest monsoon, the lifeblood of the country's farm sector, to 90 percent from the earlier 92 percent of the average rainfall between June and September.