The Union Cabinet has approved a subsidy of Rs 30,000 crore for public sector Oil Marketing Companies (OMCs). The subsidy is meant to compensate the companies for losses on the sale of domestic LPG and will be paid in twelve parts.
The Ministry of Petroleum and Natural Gas will distribute the compensation among the three oil companies, namely Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL).
The decision aims to protect consumers from changes in global LPG prices and support the financial health of the public sector oil companies. The announcement was made by Union Minister Ashwini Vaishnaw after the cabinet meeting.
During the announcement, Vaishnaw highlighted that this support is given keeping in mind the current geopolitical scenarios and uncertainties in the oil and gas sector.
“To ensure that the LPG gas is affordable for the middle class, a subsidy of Rs 30,000 cr has been approved…In present geopolitics, gas prices fluctuate and to take care of that, the subsidy is given..,” Ashwini Vaishnaw said.
LPG cylinders are sold to consumers at government-regulated prices. In 2024-25, international LPG prices remained high.
However, the government did not pass the increased cost to consumers. As a result, the three companies faced losses. Despite this, they continued supplying LPG cylinders.
The subsidy will help companies cover the costs of buying crude oil and LPG, repay loans and invest in operations. It will also support the continued supply of domestic LPG across the country.
It also supports the goal of providing LPG to households, including those under government schemes like the Pradhan Mantri Ujjwala Yojana.
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