Government offers one-time compensation of Rs 22,000 crore to state-owned oil companies

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New Delhi: I&B Minister Anurag Thakur on Wednesday said the government will provide a one-time compensation of Rs 22,000 crore to three state-owned fuel traders to make up for losses they incurred in the past two years by selling domestic cooking gas LPG below cost.

The one-time gift to three Petroleum Marketing Organizations, namely, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited, was approved by the Federal Cabinet, led by Prime Minister Narendra Modi, at a meeting on Wednesday (HPCL) ), at a press conference, Thakur spoke.

The grant will be used to repay losses incurred from June 2020 to June 2022 when LPG is sold below cost to consumers.

The three companies offer customers domestic LPG at prices governed by the government.

The price of LPG in the international market increased by more than 300% between June 2020 and June 2022.

An official statement indicated that the cost hike was partly passed on to domestic LPG consumers to protect them from changes in LPG prices abroad.

She added that the local LNG prices only rose by 72% during this time, adding that this led to huge losses for the three companies.

“Despite these losses, the three operating offices of PSU have ensured a continuous supply of this primary cooking fuel in the country. The government has therefore decided to provide a one-time grant to three PSU private operators in exchange for these losses in domestic LPG.

The three Oil Marketing Companies will receive a one-time grant of Rs 22,000 crore from the Federal Cabinets (OMCs).

This selection will enhance the dedication of PSU OMCs at Atmanirbhar Bharat Abhiyaan by ensuring uninterrupted domestic LPG supply and promoting the purchase of made in India goods.



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