Cupboard okays Rs 30,000 crore as compensation to public sector OMCs for losses in home LPG

The Union Cupboard, chaired by Prime Minister Narendra Modi, on Friday authorised Rs 30,000 crore compensation to 3 public sector Oil Advertising Corporations (IOCL, BPCL and HPCL) for the under-recoveries incurred on the sale of home LPG.

The distribution of the compensation inside the OMCs will likely be performed by the Ministry of Petroleum and Pure Fuel. The compensation will likely be paid in 12 tranches, a Cupboard communique mentioned.

In line with the federal government, this vital step additionally underlines the dedication to guard shoppers from volatility in world vitality markets whereas sustaining the financial well being of those PSU OMCs.

Home LPG Cylinders are equipped at regulated costs to shoppers by the general public sector Oil Advertising firms, particularly, the IOCL, the BPCL, and the HPCL. In line with a Cupboard be aware, the worldwide costs of LPG remained at excessive ranges throughout 2024-25 and proceed to stay excessive.

Nonetheless, to insulate shoppers from fluctuations in worldwide LPG costs, the rise in value was not handed on to shoppers of home LPG, which led to vital losses for the three OMCs.

“Regardless of the losses, the Public Sector Oil Advertising Corporations have ensured steady provides of home LPG within the nation at inexpensive costs,” the Cupboard communique mentioned.

This compensation will permit the OMCs to proceed assembly their crucial necessities, akin to crude and LPG procurement, servicing of debt, and sustaining their capital expenditure, thereby making certain uninterrupted provide of LPG cylinders to households throughout the nation.

The transfer reaffirms the target of making certain the widespread availability of fresh cooking gas to all shoppers of home LPG, together with these beneath flagship schemes like PM Ujjwala Yojana, in line with the Cupboard assertion.

In the meantime, at the least 10.33 crore LPG gasoline connections have been distributed beneath the Pradhanmantri Ujjwala Yojna (PMUY) throughout the nation (as of July 1).

The PMUY, launched in Could 2016, goals to supply deposit-free LPG connections to eight crore girls from poor households throughout India, which was achieved by September 2019.