LPG cylinders: Centre to give ₹22,000 cr to state-run fuel firms to cover losses

The Union cabinet, headed by Prime Minister Narendra Modi at a meeting on Wednesday, approved the one-time grant to three oil marketing companies - Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.

The Union cabinet has approved a one-time grant of ₹22,000 crore to three state-owned fuel retailers to cover for the losses they incurred on selling domestic cooking gas LPG below cost in the last two years, information and broadcasting minister Anurag Thakur announced on Wednesday.

The grant will be for covering the losses they incurred on selling LPG below cost to consumers from June 2020 to June 2022. (REPRESENTATIVE PHOTO)

The decision was taken in a cabinet meeting, chaired by Prime Minister Narendra Modi on Wednesday. The one-time grant will be given to three oil marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), Thakur said at a media briefing.

The grant will be for covering the losses they incurred on selling LPG below cost to consumers from June 2020 to June 2022.

The three firms sell domestic LPG at government-regulated prices to consumers. Between June 2020 to June 2022, the international prices of LPG soared by around 300 per cent.

The government said the approval will help the Public Sector Undertaking Oil Marketing Companies (PSU OMCs) to continue their commitment to the “Atmanirbhar Bharat Abhiyaan”, ensuring unhindered domestic LPG supplies and also supporting the procurement of Make in India products.

“During the period from June 2020 to June 2022, the international prices of LPG increased by around 300 per cent. However, to insulate 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 raised by only 72 per cent during this period. This has led to significant losses for these OMCs,” the government said.

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