Govt clears Rs 22,000 crore grant to 3 oil PSUs to cover LPG losses
THE CABINET on Wednesday approved a one-time grant of Rs 22,000 crore to three state-owned fuel companies to cover their losses incurred over selling cooking gas LPG below cost over the past two years.
The three firms – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) – sell domestic LPG at government-regulated prices to consumers. The grant will be for the losses they incurred on selling LPG below cost to consumers from June 2020 to June 2022.
“This decision will help the PSUs to continue their commitment to the Atmanirbhar Bharat Abhiyaan, ensuring unhindered domestic LPG supplies and also supporting the procurement of Make in India products,” an official statement said.
International prices of LPG rose by around 300 per cent from June 2020 to June 2022, the government said.
“To insulate consumers from fluctuations in international LPG prices, the cost increase was not fully passed on to consumers of domestic LPG,” Anurag Thakur, Information and Broadcasting Minister, told reporters after the Cabinet meeting.
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 oil marketing companies have ensured continuous supplies of this essential cooking fuel in the country. The government has therefore decided to give a one-time grant… for these losses in domestic LPG,” an official statement said.
