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Cabinet clears Rs 22,000 crores grant for oil firms to offset LPG losses

Cabinet booster shot for OMCs

The Union Cabinet, chaired by Prime Minister Narendra Modi, today decided to provide a one time grant amounting to Rs 22,000 crore to three Public Sector Undertaking Oil Marketing Companies (PSU OMCs). International prices of LPG between June 2020 and June 2022, increased 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.

The grant will be distributed among Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL), an official statement said.

As per the statement, the domestic LPG prices have increased by only 72 per cent during this period.  “This has led to significant losses for these OMCs,” it added.

The proposal had come from the Ministry of Petroleum & Natural Gas.

The move will help the PSU OMCs to continue their commitment to the Atmanirbhar Bharat programme, ensuring unhindered domestic LPG supplies and also supporting the procurement of Make in India products.

Despite these losses, the three PSU OMCs have ensured continuous supplies of this essential cooking fuel in the country.

The Centre also approved a productivity-linked bonus of Rs 1,832 crore for the 11.27 lakh employees of the railways. Besides, a new scheme “Prime Minister’s Development Initiative for North East Region (PM-DevINE) has also been okayed for the remaining four years of the 15th Finance Commission from 2022-23 to 2025-26.

Also read: Cabinet okays Rs 10,000 crore plan to redevelop 3 major railway stations