With global prices for liquefied petroleum gas (LPG) surging, the Union Cabinet on Wednesday approved a ₹22,000-crore ‘one-time grant’ to public sector oil marketing firms to make good losses they have faced over the past two years in domestic LPG cylinder supplies.
ADVERTISEMENT
Domestic LPG cylinders are supplied at regulated prices to consumers by the public sector oil marketing players Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum Corporation, which will get the grant.
Though international prices for LPG have risen by 300% between June 2020 and June 2022, the increased costs have not been fully passed on to domestic LPG users to insulate them from fluctuations in global prices, as per an official communique from the government. “Accordingly, domestic LPG prices have [been] raised by only 72% during this period. This has led to significant losses for these oil marketing companies (OMCs). Despite these losses, the three public sector OMCs have ensured continuous supplies of this essential cooking fuel in the country,” the statement said.
Earlier this month, the price for a 19 kg commercial LPG cylinder was reduced slightly to ₹2,009.50 in Chennai from ₹2,045. The prices for domestic LPG cylinders were last hiked in July by about ₹50 for a 14.2 kg cylinder, taking the cost to ₹1,068.5 in Chennai and ₹1,053 in New Delhi.
The approval will help 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, the government said.