Domestic LPG losses: Cabinet nod for ₹22,000 crore grant to 3 oil PSUs

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday (October 12) approved the proposal of Ministry of Petroleum & Natural Gas to give one-time grant of ₹22,000 crore to three Public Sector Undertaking Oil Marketing Companies (PSU OMCs).

The grant will be distributed among Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL), a statement from the Ministry of Petroleum & Natural Gas said.

“The approval will help the 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,” it added.

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

During the period from June 2020 to June 2022, the international prices of LPG increased by around 300%. 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% during this period. This has led to significant losses for these OMCs, the ministry said.

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