The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved Rs 30,000 crore in compensation to three public sector oil marketing companies — Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) — for losses incurred on domestic LPG sales. The amount will be distributed by the Ministry of Petroleum and Natural Gas in twelve tranches.
Domestic LPG cylinders are supplied at regulated prices by these OMCs. With international LPG prices remaining elevated through 2024-25, the companies absorbed the cost increase without passing it on to consumers, resulting in substantial under-recoveries. Despite these losses, supply of domestic LPG was maintained across the country.
The approved compensation will help the OMCs meet key needs, including crude and LPG procurement, debt servicing and capital expenditure, ensuring uninterrupted LPG availability. The move also reinforces the government’s commitment to protect consumers from global price volatility and maintain access to clean cooking fuel under schemes such as the Pradhan Mantri Ujjwala Yojana.
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