LPG cylinder: Govt to give ₹22,000 crore to PSU oil companies to cover losses

1 min read . Updated: 12 Oct 2022, 04:00 PM IST Agencies

The Indian government has approved a one-time grant of ₹22,000 crore

The Indian government has approved a one-time grant of ₹22,000 crore to state run fuel retailers for selling cooking gas (LPG) at below market rates, Information Minister Anurag Thakur told a news conference on Wednesday. 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 (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), Thakur told a news 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.

However, to insulate consumers from fluctuations in international LPG prices, the cost increase was not fully passed on to consumers of domestic LPG, an official statement said.

Accordingly, domestic LPG prices have risen by only 72 per cent during this period, it said adding this led to significant losses for the three firms.

"Despite these losses, the three PSU OMCs have ensured continuous supplies of this essential cooking fuel in the country. The government has therefore decided to give a one-time grant to the three PSU OMCs for these losses in domestic LPG," it said.

The Union Cabinet approved a one-time grant amounting to ₹22,000 crore to the three oil marketing companies (OMCs).

"This decision 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."

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.