The government on Wednesday granted an outlay of Rs 22,000 crore to three state-owned fuel retailers to compensate for the losses they sustained when selling LPG below cost to consumers from June 2020 to June 2022, providing a significant reprieve to public sector oil marketing businesses.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd. received a one-time grant that was authorized by the Union Cabinet (HPCL). The three companies offer clients domestic LPG at prices that are governed by the government.
“Between June 2020 and June 2022, the international prices of LPG soared by around 300 percent. 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.
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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.
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