Union Cabinet approves compensation amounting to Rs 30000 crore to three Public Sector Oil Marketing Companies

The Union Cabinet 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 distribution of the compensation within the OMCs will be done by the Ministry of Petroleum and Natural Gas. The compensation will be paid in twelve tranches. Domestic LPG Cylinders are supplied at regulated prices to consumers by the public sector Oil Marketing companies namely, IOCL, BPCL, HPCL. The international prices of LPG remained at high levels during 2024-25 and continue to remain high. However, 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.

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