New Delhi: The government would provide a one-time compensation of Rs 22,000 crore to three state-owned fuel dealers to compensate them for losses experienced in the last two years by selling domestic cooking gas LPG below cost, said I&B Minister Anurag Thakur on Wednesday.
The one-time gift to three oil marketing organisations, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd., was agreed by the Union Cabinet, led by Prime Minister Narendra Modi, at a meeting on Wednesday (HPCL), At a news briefing, Thakur spoke.
The grant will be used to pay for the losses they incurred from June 2020 to June 2022 when selling LPG below cost to consumers.
The three companies offer clients domestic LPG at prices that are governed by the government.
The price of LPG on the international market increased by over 300% between June 2020 and June 2022.
An official statement noted that the cost rise was partially passed on to local LPG consumers in order to protect them from changes in the price of LPG abroad.
Accordingly, domestic LPG prices have only increased by 72% over this time, it added, adding that this resulted in huge losses for the three companies.
“Despite these losses, the three PSU OMCs have ensured continuous supplies of this essential cooking fuel in the country. The government has therefore decided to give a one-time grant to the three PSU OMCs for these losses in domestic LPG,” it said.
The three oil marketing corporations will receive a one-time grant of Rs 22,000 crore from the Union Cabinet (OMCs).
This choice will boost the PSU OMCs’ dedication to the Atmanirbhar Bharat Abhiyaan by guaranteeing uninterrupted domestic LPG supplies and promoting the purchase of Made in India goods.