Oil Companies' Losses on LPG Expected to Decrease

LPG losses incurred by oil marketing companies (OMCs) are expected to decrease by around 45 percent in FY26 if crude oil prices remain stable at USD 65 per barrel, according to a report by CareEdge Ratings.

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The report stated that the cumulative LPG under-recoveries are likely to reduce significantly next fiscal year, mainly due to a mix of higher retail prices and lower international LPG prices.

It said "Cumulatively, the LPG under-recoveries are expected to decrease by ~45% in FY26 if crude oil prices remain around USD 65/bbl".

These under-recoveries refer to the losses suffered by oil companies when they sell LPG cylinders below their cost price, as prices are regulated by the government to keep cooking gas affordable for households.