Oil Companies compensation: Announcing a big relief for state-run oil companies, the Centre on Wednesday approved a one-time compensation of Rs 22,000 crore for them. The decision was taken in Cabinet meeting chaired by Prime Minister Narendra Modi
"LPG prices are increasing across the world. One-time grant of Rs 22,000 crore has been given to Oil Marketing Companies of Public Sector Undertakings so that the burden of rising prices does not fall on common people: Union Minister Anurag Thakur said in a media briefing following the Cabinet decision
The one-time grant will be provided to three oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). The three firms sell domestic LPG at government-regulated prices to consumers.
Between June 2020 to June 2022, the international prices of LPG soared by around 300 per cent.
However, to insulate consumers from fluctuations in international LPG prices, the cost increase was not fully passed on to consumers of domestic LPG, an official statement said.
Accordingly, domestic LPG prices have risen by only 72 per cent during this period, it said adding this led to significant losses for the three firms.
"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 Union Cabinet approved a one-time grant amounting to Rs 22,000 crore to the three oil marketing companies (OMCs).
"This decision will help the PSU OMCs to continue their commitment to the Atmanirbhar Bharat Abhiyaan, ensuring unhindered domestic LPG supplies and also supporting the procurement of Make in India products."
(With PTI inputs)