LPG under-recovery reportedly rose to ₹327 per 14.2-kg domestic cylinder in November, increasing pressure on state-owned oil marketing companies and raising questions about the cost of keeping household cooking fuel below prevailing market rates. The figure was attributed to Hindustan Petroleum Corporation (HPCL) Chairman Vikas Kaushal during a post-results analyst call, according to The Hindu BusinessLine.
The report said HPCL’s LPG under-recovery increased from ₹245 per cylinder in October to ₹327 in November, a rise of nearly 34 per cent. Under-recovery refers to the gap between the cost incurred by an oil marketing company and the price at which LPG is sold to consumers. When that gap widens, the impact is reflected in the finances of public-sector oil companies or through government support mechanisms.
The report also said HPCL’s total under-recovery in the second quarter of FY27 was approximately ₹18,049 crore. It cited earlier figures of about ₹12,798.67 crore as of March 31, 2026, and ₹14,240.64 crore as of September 30, 2025. At the industry level, under-recovery was reported at around ₹721 per cylinder in June before falling to approximately ₹500 in July, ₹188 in August and ₹210 in September.
The cumulative under-recovery of Indian Oil Corporation, HPCL and Bharat Petroleum Corporation was reported to have risen from roughly ₹51,000 crore in June to more than ₹62,000 crore in August 2026. These figures indicate the scale of the financial exposure faced by the three state-owned oil marketing companies as they continue supplying domestic LPG at prices below prevailing market-linked costs, according to the report.
Freight expenses have added to the pressure. HPCL management reportedly told analysts that freight rates nearly doubled between the first and second quarters of FY27. The report cited US LPG pricing linked to Mont Belvieu, which stood at $0.68 per gallon in August 2026, or approximately $360 per tonne. Although this benchmark is generally lower than Saudi Contract Prices, longer voyages to India can increase the delivered cost.
The report also cited Equirus Securities, which said Houston–Asia very large gas carrier freight crossed $200 per tonne in mid-April 2026 and rose above $300 in August as stronger eastbound demand tightened vessel availability. Higher shipping costs can widen the difference between procurement costs and regulated or controlled consumer prices, although the final effect depends on international prices, exchange rates, domestic logistics and pricing decisions.
Alongside the LPG disclosure, HPCL management said it had refinanced the entire ₹45,000–50,000 crore debt of HPCL Rajasthan Refinery, located in Barmer. The refinancing agreements were signed at the end of September and took effect from October 3, according to the company’s statement cited by the report. The revised structure is expected to lower the interest rate by about 105 basis points and provide an annual benefit of approximately ₹470–500 crore.
HPCL also said it expected further equity calls in the following one or two quarters to reduce the refinery company’s total debt burden. On an like-for-like comparison, the company estimated that its interest burden could decline by about ₹1,000 crore compared with the previous year.
The supplied report contains a material timeline issue: it was published on October 23, 2026, but describes the ₹327 figure as a November 2026 under-recovery. The date and the underlying HPCL disclosure require confirmation before the figure can be treated as established. The company’s primary presentation or transcript, along with the relevant monthly LPG pricing and under-recovery data, should establish whether the figure refers to October, an earlier reporting period, or a later publication date.
