Oil PSUs to get Rs 30,000 crore as compensation for losses in Domestic LPG: Govt

The Government of India under Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has approved compensation amounting to Rs.30,000 crore to the three Public Sector Oil Marketing Companies (IOCL, BPCL & HPCL) for the under- recoveries incurred on sale of domestic LPG. 

The Ministry of Petroleum and Natural Gas will distribute the compensation within the Oil Marketing Companies (OMCs) and will be paid in 12 tranches.

Domestic LPG Cylinders are supplied at regulated prices to consumers by the public sector Oil Marketing companies namely, IOCL, BPCL, HPCL.

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The international prices of LPG remained at high levels during 2024-25 and continue to remain high and to insulate consumers from fluctuations in international LPG prices, the increase in cost was not passed on to consumers of domestic LPG which led to significant losses for the three OMCs.

Despite the losses, the Public Sector Oil Marketing Companies have ensured continuous supplies of domestic LPG in the country at affordable prices.

This compensation will allow the OMCs to continue meeting their critical requirements such as crude and LPG procurement, servicing of debt, and sustaining their capital expenditure, thereby ensuring uninterrupted supply of LPG cylinders to households across the country.