Cabinet Approves Rs 30,000 Cr Subsidy to Compensate Oil Firms for Cooking Gas Losses

In a move to mitigate domestic consumers from the burden of high international energy prices, the Union Cabinet headed by Prime Minister Narendra Modi on Friday sanctioned Rs 30,000 crore compensation to three government-run Oil Marketing Companies (OMCs)—Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL)—for under-recoveries suffered on selling domestic LPG in 2024-25.

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The Ministry of Petroleum and Natural Gas will administer the disbursement of the compensation, to be paid in 12 installments.

These OMCs sell domestic LPG cylinders to consumers at controlled prices in their homes. Though international LPG prices remained high during 2024-25, the government did not transmit the high cost to consumers, leading to heavy financial losses for the companies. Yet, the three OMCs ensured the uninterrupted availability of domestic LPG at reasonable prices, supporting the households by bearing the price shocks.