NEW DELHI: In a major relief to public sector oil firms, the Cabinet on Friday approved a Rs 30,000 crore compensation package to offset their losses from selling domestic LPG below cost amid elevated international prices.The package will be paid to Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) in 12 tranches. The Ministry of Petroleum and Natural Gas will handle the internal distribution of funds among the three, according to a release.“Despite the losses, the Public Sector Oil Marketing Companies have ensured continuous supplies of domestic LPG in the country at affordable prices,” the government said in a statement.The Cabinet noted that domestic LPG is supplied at regulated rates by PSUs and that international LPG prices remained elevated throughout 2024-25. To shield consumers from this volatility, the government did not pass on the increased costs, resulting in significant losses for the OMCs.The compensation will help the companies meet key operational needs such as crude and LPG procurement, debt servicing, and capital expenditure, thereby maintaining uninterrupted LPG supply nationwide.The government said this step reinforces its commitment to protect consumers from global energy shocks while maintaining the financial stability of PSU oil firms. It also reaffirmed the goal of ensuring access to clean cooking fuel, including for Pradhan Mantri Ujjwala Yojana beneficiaries.
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