Govt Likely To Soon Compensate Oil Companies For LPG Losses

The total under-recovery on LPG sales for the industry in the 2024-25 fiscal year is estimated at about Rs 40,500 crore

- OUR CORRESPONDENT

NEW DELHI: The government is likely to give a subsidy of Rs 30,000-35,000 crore to state-run oil companies - Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) - to compensate for losses incurred from selling LPG at below cost over the past 15 months, according to a senior official.

The finance ministry is working out the exact under-recovery or loss incurred and the mechanism to compensate it, he said.

In the Union Budget for 2025-26 fiscal (April 2025 to March 2026) presented on February 1, the government has made no provision to compensate for the under-recoveries. However, in April, the government raised excise duty on petrol and diesel to garner additional Rs 32,000 crore in revenues.