The commission an LPG distributor earns on a domestic cylinder is set by the government and the public-sector oil companies, and PPAC publishes every revision since April 2004. Read in current rupees, the record looks like steady progress: Rs 16.71 a cylinder in 2004, Rs 73.08 since October 2023, a 4.4-fold rise. Read against consumer prices, it looks different. From 2012 to 2018 each revision did little more than restore what inflation had taken. The one real raise came in three monthly steps in 2019, and inflation has since taken most of it back. In December 2025 rupees the commission is worth about what it was in October 2012.

How much to trust it. The revision history to May 2022 is PPAC’s own table, posted on 4 July 2022. The October 2023 rate of Rs 73.08 is from PPAC’s commission page as this blog read it in August 2026; a 2024 CEEW survey report also gives Rs 73.08, while a Goa government notice of March 2024 gives Rs 73.03, which looks like the outlier. Inflation is MoSPI’s consumer price index, which in this series runs to December 2025. Cylinder prices and the distributor numbers come from Parliament replies, PIB and press reports as seen in search summaries. Where this piece does its own arithmetic, it says so.

The record

The 5 kg cylinder has carried half the 14.2 kg rate throughout. From October 2012 to July 2019 PPAC also lists an “additional commission for sale at market-determined price”, paid on non-subsidised cylinders: Rs 0.75 to Rs 0.82 until 2015, then reset almost every month between Rs 0.06 and Rs 0.63. It ended when the August 2019 revision took effect. Real values start in July 2011 because the MoSPI index used here begins in 2011.

Three phases

Before 2004. The earliest rate found is Rs 3.37 a cylinder from August 1972, set on the report of the Shanti Lal Shah Committee, according to a 1980 Lok Sabha reply.

2004 to 2011: small steps. Five revisions took the commission from Rs 16.71 to Rs 25.83, about 55% in seven years. The consumer price index used here does not reach back that far, so this phase is shown only in current rupees.

2012 to 2018: a jump, then a treadmill. October 2012 brought the largest single step in the record, 44%, from Rs 25.83 to Rs 37.25. Press reports at the time said the increase was passed on to consumers in the cylinder price, and the distributors’ federation still asked for Rs 65. Six revisions followed between December 2013 and November 2018. Each looks like a raise in current rupees, but in December 2025 rupees every one of them set the commission back to between Rs 70 and Rs 73. A 2014 Lok Sabha reply says the revisions were made on the recommendation of the oil companies and PPAC, and a November 2018 report, as relayed in search summaries, describes the Rs 50.58 rate as interim, pending a fresh cost study.

2019 to now: one real raise, then erosion. In August, September and October 2019 the commission rose from Rs 50.58 to Rs 61.84 in three steps, 22% in all, while the separate market-price commission was dropped. That lifted the real value to Rs 83.18, the highest in the series. Then came 31 months without a revision, while consumer prices rose 16.6%. The May 2022 step of 4.9% did not close that gap, and the October 2023 step of 12.7% left the commission at Rs 78.09 in December 2025 rupees on the day it took effect. By December 2025, with no revision found since, it was back to Rs 73.08 in December 2025 rupees, 2.7% above October 2012.

What the commission pays for

The commission is not all margin. A Goa government notice of March 2024, citing the Government of India, says the Rs 73.03 it quotes includes Rs 33.65 a cylinder for home delivery, and that distributors may not charge households extra for delivery. A 2015 Lok Sabha reply put the delivery charge at Rs 18. On the March 2024 figures, delivery takes 46% of the commission, leaving about Rs 39 a cylinder for the showroom, godown, staff and administration. The notice says the rate is revised from time to time on the basis of a cost study by IIM Ahmedabad. A 2006 Lok Sabha reply says the oil companies had received IIM Ahmedabad’s “Study on Dealers Commission & Marketing Expenses”, and a later reply says a committee of the three public-sector companies’ marketing directors and a PPAC director re-examined the LPG commission from first principles, after which the October 2014 rate was split into an establishment component and a delivery component. Neither study’s findings have been found in public.

Against the cylinder price

Because the commission moves in steps and the cylinder price moves every month, the commission’s share of what a household pays swings widely. Unlike the petrol and diesel dealer, who since 2013 (petrol) and 2014 (diesel) has been paid a fixed amount plus a percentage of the product price, the LPG distributor gets a flat amount, so a higher cylinder price passes nothing through to the distributor.

The share ran from 6.2% to 9.6% across these dates. It was lowest when the cylinder was dearest, in December 2018 and July 2022, and highest when it was cheapest, in December 2020. These are prices at the Delhi counter. Before 2015 households paid a subsidised price; since direct benefit transfer the counter price is the market price, and Ujjwala households get a subsidy credited separately.

A distributor’s month, roughly

On these assumptions the average distributor delivers about 6,089 cylinders a month and earns about Rs 4.4 lakh in gross commission, of which about Rs 2.0 lakh is the delivery component. That is close to the Rs 4.77 lakh this blog estimated for the average petrol pump. No published study of distributor costs or net income was found. The 14.9 million tonnes is a half-year figure and doubling it ignores seasonality, the count of distributors may include ones outside the public-sector companies, and 5 kg cylinders are counted as 14.2 kg equivalents.

What the distributors’ associations say

The average hides a wide spread. A CEEW telephone survey of 904 distributors of all three oil companies in six states, run from October 2022 to March 2023, found that 43% of rural distributors and 36% of urban ones sold fewer than 2,500 refills a month, the minimum the report treats as feasible. Only 52% of rural distributors said they delivered to the home of more than 90% of their customers, against 72% of urban ones. A 2019 CAG audit of Ujjwala found more than half the sampled distributors travelling 15 to 92 km to deliver, although the marketing guidelines set a 15 km radius. A flat commission per cylinder pays the same to a high-volume city agency and a thin rural one.

At least three national bodies speak for distributors, and press reports do not always name them consistently:

• Federation of LPG Distributors of India. In September 2026 its national president, P Venkateshwar Rao, said distributors get only what the oil companies allot them and cannot promise instant delivery during supply constraints, in a statement reported from Hyderabad. With the All India federation, it opposed the penalty and termination clauses of the oil companies’ Marketing Discipline Guidelines, saying they made distributors answerable for every lapse with no matching duty on the companies; a threatened strike was put off when the companies set up a committee with federation members. The reports of that dispute seen here are undated.
• All India LPG Distributors Federation, reported in April 2025 as the LPG Distributors Association, president B S Sharma. At a convention in Bhopal it gave the government three months to raise the commission to at least Rs 150 a cylinder, said oil companies were pushing commercial cylinders on distributors without demand, raised problems with Ujjwala deliveries, and threatened an indefinite national strike. No outcome was found. A 2014 Lok Sabha reply records an earlier federation request that preceded the Rs 44.06 revision, and a 1992 reply records a federation notice of 13 demands with a threat to stop home deliveries.
• National Federation of LPG Distributors of India. When the commission rose to Rs 37.25 in October 2012, it called the increase inadequate and asked for Rs 65 a cylinder and a single pricing policy for LPG.

Outside the trade, CEEW recommends a differentiated commission, with a top-up for distributors serving remote or low-volume rural customers, and Prayas Energy Group has proposed performance-based incentives and a differential commission for rural distributors. A 2021 parliamentary standing committee report noted complaints that some oil companies enforced the guidelines with high penalties and linked commission revisions to wage increases for distributor staff. The associations’ own websites could not be opened for this piece, so their statements are as reported in the press.

Compared with the pump and the kerosene dealer

Since 2017 the LPG distributor has done better in real terms than the petrol dealer. In December 2025 rupees the LPG commission was Rs 71.60 after the September 2017 revision and is Rs 73.08 now, up 2%. The fixed part of the petrol dealer’s commission fell from Rs 3.91 to Rs 3.14 a litre over a similar span, down 20%, because it went unrevised from August 2017 to October 2024, though the petrol dealer’s percentage component rose with prices. The wholesale commission on PDS kerosene, the third administered margin PPAC tracks, rose from Rs 204 a kilolitre in 2004 to Rs 1,341.88 in February 2019 and shows no revision after that in a table posted in July 2022, as PDS kerosene is phased out.

Timeline

What is not known

1. The exact current rate. Rs 73.08 (PPAC page as read in August 2026, and CEEW 2024) against Rs 73.03 (Goa notice, March 2024).
2. Any revision after October 2023. None was found, and the April 2025 demand for Rs 150 has no reported outcome.
3. The cost studies. Neither the IIM Ahmedabad study nor the oil companies’ first-principles review has been found in public.
4. Distributor income. The monthly figures above are this blog’s estimate from national totals, not a measured average.
5. Inflation in 2026. The MoSPI series used here ends in December 2025; a new series on a 2024 base was not linked.

What would fix this

• PPAC should keep the LPG commission table current and show the delivery component separately, so the share that pays for delivery can be tracked.
• The Ministry of Petroleum and Natural Gas should publish the cost study behind the rate, so the basis for Rs 73 and for the distributors’ Rs 150 can be compared.
• The commission could be differentiated for remote, low-volume distributors, as CEEW and Prayas have proposed, instead of one flat rate for every agency.
• The non-delivery part of the commission could be indexed to consumer prices between studies, as the percentage component already does for petrol and diesel, so the real value does not depend on when the next revision comes.

These are proposals from this blog, not recommendations any agency has adopted.

Sources and caveats

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.