Government to Provide Major LPG Subsidy Boost to State-Run Oil Corporations

The Indian government plans to subsidize state-run oil companies with Rs 30,000-35,000 crore due to the losses from selling LPG below cost over the past 15 months. The finance ministry is assessing the losses, and compensation plans will be proposed to the Cabinet for approval.


Devdiscourse News Desk | New Delhi | Updated: 10-07-2025 13:08 IST | Created: 10-07-2025 13:08 IST
Government to Provide Major LPG Subsidy Boost to State-Run Oil Corporations
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The Indian government is poised to offer a substantial subsidy of Rs 30,000-35,000 crore to state-owned oil companies like Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum. This move aims to offset the losses they've endured from selling liquefied petroleum gas (LPG) below market cost over the last 15 months, confirmed a senior official.

Finance ministry officials are currently computing the under-recovery figures and developing a compensation mechanism. Notably, the Union Budget for the fiscal year 2025-26 did not allocate funds for this compensation but additional revenue from increased excise duties on petrol and diesel in April could be utilized for this purpose.

The official also revealed that while modalities for fund distribution are under review, the proposal will eventually seek Cabinet approval. Compensation practices are not new, with previous payouts proving essential for sustainability in managing domestic LPG pricing.

(With inputs from agencies.)

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