The Union Cabinet has approved a substantial subsidy package amounting to ₹30,000 crore for public sector Oil Marketing Companies (OMCs) in a move aimed at safeguarding Indian consumers from the volatility of global LPG prices and strengthening the financial position of these state-run enterprises. This compensation, which will be disbursed in twelve instalments, is intended to offset the heavy losses incurred by the companies due to their continued supply of LPG cylinders at regulated rates despite soaring international prices.
The Ministry of Petroleum and Natural Gas will be responsible for distributing the compensation among the three major oil corporations — Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL). These companies bore the financial burden over the past financial year as the government opted not to increase consumer prices despite a persistent rise in global LPG rates.
Union Minister Ashwini Vaishnaw, while announcing the decision after the Cabinet meeting, emphasized the importance of this subsidy in light of the ongoing global geopolitical instability. He stated that the financial assistance would ensure LPG remains affordable for the middle-class population and provide necessary relief to the oil companies that have continued to serve the public despite financial setbacks.
The minister further explained that the government is committed to protecting consumers from erratic fuel pricing caused by international developments and that this support is crucial for ensuring uninterrupted access to domestic LPG throughout the country. The assistance will help the companies manage various operational costs, such as crude oil procurement and LPG sourcing, as well as enable them to repay existing debts and invest in infrastructure and service improvements.
In addition to addressing immediate financial concerns, the subsidy aligns with the government’s broader objective of promoting LPG usage in Indian households, especially under welfare programs like the Pradhan Mantri Ujjwala Yojana. By ensuring the continued availability of domestic LPG at stable prices, the government aims to enhance energy access and affordability across both urban and rural populations.
