Govt Approves ₹30,000 Cr Compensation for OMCs

• The Union Cabinet has approved a ₹30,000 crore compensation package for three public sector OMCs: IOCL, BPCL, and HPCL.
• The compensation is for “under-recoveries” on the sale of domestic LPG, as high international prices were not passed on to consumers.
• The compensation will be paid in twelve tranches to help the OMCs maintain financial health and ensure a continuous supply of LPG.

GG News Bureau
New Delhi, 8th Aug: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a compensation package of ₹30,000 crore for three Public Sector Oil Marketing Companies (OMCs) to cover losses incurred on the sale of domestic LPG. The compensation will be paid to Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) in twelve tranches.

The decision comes after the international prices of LPG remained at high levels during the 2024-25 financial year. To protect domestic consumers from these fluctuations, the OMCs did not pass on the increased costs, leading to significant financial under-recoveries. According to a government release, the compensation will allow these companies to meet critical financial requirements, including procuring crude and LPG, servicing debt, and sustaining capital expenditure.

This measure ensures the uninterrupted supply of LPG cylinders to households across the country and reflects the government’s commitment to consumer protection from global energy market volatility. The decision also aligns with the objective of ensuring the widespread availability of clean cooking fuel, a key goal of schemes like the Pradhan Mantri Ujjwala Yojana.