Govt may grant ₹35,000 crore LPG subsidy to IOC, BPCL, and HPCL.

The government plans to grant a ₹35,000 crore subsidy to IOC, BPCL, and HPCL to offset losses from selling domestic LPG at regulated prices. Despite rising input costs, the companies have kept LPG prices unchanged at ₹803 per cylinder since March 2024, resulting in under-recoveries of about ₹40,500 crore for the current fiscal year.

The subsidy will be disbursed over two years, with ₹10,000 crore in 2024-25 and ₹25,000 crore in 2025-26, likely included in the upcoming Union Budget. LPG prices remain regulated to shield households from high market rates, causing losses due to the gap between retail prices and international benchmarks.

Previously, the government compensated these companies ₹22,000 crore for under-recoveries in 2021-22 and 2022-23. IOC, BPCL, and HPCL are estimated to account for ₹19,550 crore, ₹10,570 crore, and ₹10,400 crore of the current year’s under-recovery, respectively. Additional provisions may be made to address any GST liabilities on the subsidy payout.