Government Boosts Public Sector Oil Firms with Rs 30,000 Crore Compensation
The Indian government has approved a Rs 30,000 crore compensation to state-run oil firms IOCL, BPCL, and HPCL for under-recoveries in domestic LPG sales. Paid in twelve tranches, the move ensures affordable LPG supply while maintaining the financial health of these companies amid high international LPG prices.
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The Union Cabinet, led by Prime Minister Narendra Modi, has sanctioned a substantial Rs 30,000 crore compensation package for three public sector oil marketing companies: Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL). This financial aid aims to offset the losses incurred from under-recoveries in the domestic LPG sales sector. The Ministry of Petroleum and Natural Gas will manage the distribution of this compensation among the involved companies.
The settlement will be disbursed over twelve tranches. Currently, IOCL, BPCL, and HPCL supply domestic LPG cylinders to consumers at regulated prices, a strategy that prevents market fluctuation from affecting consumers unfavorably. Despite significant losses, these firms have continued to ensure a steady supply of LPG across India at economical prices. The compensation is critical to helping these companies maintain essential functions like crude and LPG procurement and manage their debts and capital expenditure needs.
This measure underscores the government's dedication to shielding consumers from the volatility of the global energy market, thereby safeguarding the financial well-being of public sector oil marketers. Moreover, it reinforces the objective of ensuring widespread access to clean cooking fuel for all domestic LPG consumers, including those benefitting from initiatives like the PM Ujjwala Yojana.
(With inputs from agencies.)
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