LPG Update: If you use a domestic LPG cylinder, there is significant news for you. On one hand, the government is set to make a major change to LPG subsidy rules starting October 1, 2026. On the other hand, if you hold a domestic LPG connection, you should complete the e-KYC process; failing to do so could lead to considerable difficulties later. Cylinder pricing will now be linked to e-KYC status, as those who do not complete the process will receive LPG cylinders at the market-determined price—meaning they will have to purchase non-subsidised LPG, which will significantly impact their finances.

According to the Ministry of Petroleum and Natural Gas, biometric Aadhaar authentication is now mandatory for subsidised cylinders.

Indian Oil Corporation, Hindustan Petroleum, and Bharat Petroleum have issued guidelines to all gas agencies stating that consumers who do not complete their e-KYC will have the option of purchasing 5 kg or 10 kg gas cylinders at commercial rates.

Old Rule to be Re-implemented After 10 Years

Reports indicate that a dual-pricing system for LPG cylinders is set to return after a decade. This means that consumers who complete the e-KYC for their LPG connection will receive subsidised cylinders, while those who do not will receive cylinders at the non-subsidised market rate. An official date for the implementation of this system will be announced soon.

Two Rates for Domestic Gas Cylinders

Oil companies will soon implement the dual-pricing system. Currently, the cylinder price is ₹952, which includes a subsidy of ₹12. Under the dual-pricing system, there will be two rates for domestic LPG cylinders: consumers who do not complete e-KYC and those under the Ujjwala Yojana will be provided cylinders at the market rate (without subsidy).

What Will Change from October 1?

Under the new rule, domestic LPG consumers who have not yet completed their biometric Aadhaar authentication will be required to do so to book gas refills at subsidised rates starting from October 1, 2026. However, there is some relief: approximately 89.9 per cent of active LPG consumers had already completed this process by September 19.

Subsidy and Compensation
Domestic LPG is sold at a price lower than its cost. The estimated implicit subsidy on a 14.2-kg cylinder for September 2026 is around ₹210, down from ₹721 in June. The government has stated that it provided ₹22,000 crore in compensation to oil marketing companies in FY23. It is paying ₹30,000 crore as compensation for FY26 and FY27.