Aug 11, 2025 (MarketLine via COMTEX) --
This financial support will be distributed in 12 tranches to ensure OMCs continue to provide LPG at regulated prices.
The Indian Government has sanctioned Rs300bn ($3.4bn) to three state-run oil marketing companies (OMCs), Indian Oil, Bharat Petroleum and Hindustan Petroleum, to cover losses from under-recoveries on domestic liquid petroleum gas (LPG) sales.
This financial support will be distributed in 12 tranches and aims to ensure the OMCs can continue to provide LPG at regulated prices despite high international rates, according to a report by ETEnergyworld.com.
The Ministry of Petroleum and Natural Gas is tasked with the allocation of funds among the OMCs.
International prices of LPG have remained high and the government has chosen not to transfer the increased costs to consumers, leading to significant under-recoveries by the OMCs.
Despite these losses, Indian Oil, Bharat Petroleum and Hindustan Petroleum have maintained a steady supply of LPG cylinders throughout the nation.
The compensation is seen as a crucial step in enabling the OMCs to manage essential expenditures including crude oil and LPG procurement, debt servicing and capital investments.
This move is also aligned with the government's commitment to providing clean cooking fuel to all households, including those under the Pradhan Mantri Ujjwala Yojana scheme, and to uphold the financial health of public sector oil companies amidst global energy market fluctuations.
India has recently reiterated its plan to continue oil imports from Russia, despite potential repercussions suggested by US President Donald Trump.
The US has threatened a 25% tariff on Indian exports and additional sanctions should India persist in acquiring Russian arms and oil.
However, Indian Government sources have indicated that there are no immediate plans to alter the standing long-term contracts with Russia.
http://www.datamonitor.com
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall
not be liable for errors or delays in the content, or for any actions
taken in reliance thereon
COMTEX_467964756/2227/2025-08-11T09:35:02
Copyright (C) 2025 Datamonitor. All rights reserved
