Big update for LPG and CNG users: Domestic cylinder prices likely to rise as Modi government plans to impose a new levy | Details here

As per the NavBharat reports, the government is working on a plan to create strategic reserves not only for crude oil but also for Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) for the first time.

Written by: Victor Dasgupta Edited by: Victor Dasgupta

Published: August 6, 2026, 11:33 AM IST

Share

Share Article

• Facebook
• WhatsApp
• X
• Email
• Telegram
• Linkedin

https://www.india.com/business/lpg-cng-domestic-cylinder-png-liquified-petroleum-gas-standard-cubic-metre-gas-companies-lng-narendra-modi-hardeep-singh-puri-nitin-gadkari-8494348/ Copy

Image for representational purposes

New Delhi: The Modi government is reportedly planning to build a massive Strategic Fuel Reserve for the country. The Centre is considering imposing an additional levy on consumers who use gas-based fuels to fund the project. The proposed initiative is estimated to cost around Rs 42 billion (approximately Rs 4 lakh crore).

As per the NavBharat reports, the government is working on a plan to create strategic reserves not only for crude oil but also for Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) for the first time. The objective is to ensure an uninterrupted fuel supply during wars or major international crises that could disrupt imports or supply chains.

Here are some of the key details:

• The Modi government is considering imposing a levy of Rs 1.29 per kg on LPG (domestic cooking gas).
• Based on current consumption, this could generate around USD 460 million (approximately ₹4,375 crore) annually for the government.
• If implemented, the levy would also impact household LPG cylinders.
• The price of a standard domestic LPG cylinder could increase by around ₹18.
• The government is considering a levy of Rs 1.43 per Standard Cubic Metre (SCM) on natural gas.
• Based on current consumption, this could generate nearly $1 billion (around Rs 9,500 crore) in annual revenue.
• The proposed LPG and natural gas levies could generate around $1.5 billion annually for the government.
• The funds are expected to be used primarily to develop LPG and LNG storage infrastructure.

Gas bills may rise by around 2 percent

The proposed levies could increase gas bills for households and other consumers by around 2 percent, according to the reports. At a time when fuel prices are already a concern for consumers, the move could be politically sensitive.

Proposal yet to receive final approval

It is important to note that the proposal has not yet received the Modi government’s final approval. It is currently under discussion among various ministries and is awaiting clearance from the Union Cabinet, chaired by Prime Minister Narendra Modi.

Multi-fuel strategic reserve to be built over 10 years

India plans to complete its multi-fuel strategic reserve over the next 10 years, with an estimated investment of around $42 billion. More than half of this amount will be spent on building storage infrastructure, while the remaining funds will be used to purchase fuel for the reserves.