NEW DELHI। August 8, 2025, SKY LINK TIMES।
The Union Cabinet, chaired by Prime Minister Narendra Modi, on Friday approved ₹30,000 crore as compensation to three state-run Oil Marketing Companies (OMCs) — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — for under-recoveries incurred on the sale of domestic LPG during FY 2024-25.
According to the government statement, the Ministry of Petroleum and Natural Gas will oversee the distribution of the compensation among the OMCs, which will be paid in twelve tranches.
High Global LPG Prices Hit OMC Margins
International LPG prices remained elevated throughout 2024-25, and continue to stay high. However, the government absorbed the cost increase to protect households from price volatility, preventing a direct burden on consumers. This decision resulted in substantial financial losses for the OMCs, even as they maintained uninterrupted domestic LPG supply at affordable rates.
In FY 2024-25, the OMCs reported a combined LPG under-recovery of ₹41,266.91 crore:
IOCL: ₹19,926 crore
BPCL: ₹10,446.38 crore
HPCL: ₹10,894.53 crore
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Ensuring Supply & Stability
The approved compensation will help OMCs meet crude oil and LPG procurement costs, service existing debt, and sustain capital expenditure — ensuring continued supply of LPG cylinders to households nationwide.
Senior oil ministry officials had earlier indicated that the matter would be taken up by the Cabinet after the Union Budget did not include provisions for LPG under-recovery compensation in February.
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