Govt approves Rs 22,000 crore as one-time grant to 3 state-run oil marketing companies for LPG losses

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, today approved the proposal from the Ministry of Petroleum and Natural Gas to provide a one-time subsidy of Rs22,000 crore to three state-run oil marketing companies (OMCs) for the losses incurred in the domestic LPG business. The grant will be distributed among Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL).

“The approval will help PSU OMCs further their commitment to the Atmanirbhar Bharat Abhiyaanensure unimpeded domestic LPG deliveries and also support the sourcing of Make in India products,” an official release said.

Despite these losses, the three PSU OMCs have ensured a continuous supply of these essential cooking fuel in the country, it added.

Domestic LPG cylinders are supplied to consumers at regulated prices by the public sector oil marketing companies namely IOCL, BPCL, HPCL.

In the period June 2020 to June 2022, the international prices of LPG have increased by about 300%. However, in order to protect consumers from fluctuations in international LPG prices, the cost increase was not fully passed on to consumers of domestic LPG. Accordingly, domestic LPG prices have increased by only 72% during this period. This has led to significant losses for these OMCs, according to the cabinet.

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