Budget 2025 failed to announce compensation for under-recovery on sale of cooking gas cylinders incurred by the state-run oil marketing companies (OMCs).
At 2.16pm, the shares of Indian Oil Corporation Limited (IOCL) had fallen 1.18 percent on the BSE, while Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) shares tanked 0.64 percent and 2.11 percent, respectively.
For 2024-25, the government allocated Rs 14,700 crore for total LPG or liquefied petroleum gas subsidy to the OMCs, showed budget documents. The OMCs have been allocated Rs 12,100 crore for 2025-26 for LPG subsidy.
IOCL reported an under-recovery of Rs 14,325 crore on LPG cylinders in the first nine months of 2024-25. BPCL and HPCL reported under-recovery of Rs 7,228 crore and Rs 7,599 crore, respectively, in the first nine months of FY25.
The companies booked huge LPG under-recovery in the year as they kept cylinder prices unchanged despite high global prices of the fuel. To be sure, the country is dependent on LPG imports for the majority of domestic consumption.
In 2022, the government had announced a compensation of Rs 22,000 crore for the OMCs, for a cumulative loss of Rs 28,000 crore they incurred.
Oil secretary Pankaj Jain had said that the Ministry of Petroleum and Natural Gas (MoPNG) had urged the finance ministry to compensate the oil companies for LPG under-recovery.
In India, LPG prices are government-administered and sold at subsidised rates as well under the Pradhan Mantri Ujjwala Yojana (PMUY) scheme by state-owned oil refiners. IOCL, BPCL and HPCL are the three state-owned oil refiners in India.
Finance Minister Nirmala Sitharaman on February 1 presented her second budget speech of the NDA 3.0 government, and her eighth, in Parliament.
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