Home / Business and Economy / India Allocates ₹42,000 Crore to Safeguard LPG Affordability Amid Global Turmoil
India Allocates ₹42,000 Crore to Safeguard LPG Affordability Amid Global Turmoil
8 Aug
Summary
- Centre approves ₹30,000 crore compensation for LPG under recoveries in FY25
- ₹12,000 crore subsidy to provide Ujjwala consumers affordable LPG in FY26
- OMCs incurred ₹41,700 crore in under recoveries, impacting profits
On August 8th, 2025, the Indian government took decisive action to shield citizens from the impact of high global LPG prices and support the country's oil marketing companies (OMCs). The Cabinet approved a ₹30,000 crore compensation for LPG under recoveries incurred by the three state-run OMCs - Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) - in the financial year 2024-25 (FY25).
Additionally, the government allocated ₹12,000 crore as a targeted subsidy to continue providing Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries with affordable liquefied petroleum gas (LPG) cylinders in the upcoming financial year, FY26. This move aims to ensure sustained use of LPG among PMUY consumers and shield them from the volatility in international energy markets.
The OMCs had incurred cumulative under recoveries of around ₹41,700 crore in FY25, which amounts to roughly ₹220 per 14.2 kg cylinder. This financial burden had exerted pressure on the companies' profits, which are expected to decline from around ₹85,000 crore in FY24 to approximately ₹35,000 crore in FY25. The government's compensation will allow the OMCs to continue meeting their critical requirements, such as crude and LPG procurement, debt servicing, and capital expenditure, thereby ensuring uninterrupted LPG supply to households across the country.
