(Image source from: Orissapost.com)

The Union Cabinet has given the green light for a support package of Rs 30,000 crore for state-owned Oil Marketing Companies, often referred to as OMCs. This financial aid is intended to offset the losses these companies incur from selling domestic LPG, and it will be disbursed in twelve installments. The Ministry of Petroleum and Natural Gas will allocate these funds among three oil companies: Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL). This decision aims to shield consumers from fluctuations in global LPG pricing while also aiding the financial stability of these public sector oil firms. Union Minister Ashwini Vaishnaw announced this after the cabinet's meeting.

During the announcement, Vaishnaw pointed out that this aid is provided in light of the current geopolitical conditions and the unpredictability in the oil and gas industry. "To make sure that LPG remains affordable for middle-class families, we have approved a subsidy of Rs 30,000 crore... Given the current geopolitical climate, gas prices vary, and this subsidy is provided to address that," stated Ashwini Vaishnaw. LPG cylinders are made available to consumers at prices set by the government. In 2024-25, international LPG prices were notably high. Nonetheless, the government chose not to transfer the increased costs to the consumers. Consequently, the three companies encountered financial losses. Nevertheless, they sustained the supply of LPG cylinders. This subsidy will assist the companies in managing the expenses for procuring crude oil and LPG, repaying debts, and investing in their operations. It will also ensure the continued distribution of domestic LPG throughout the nation. Additionally, it aligns with the objective of providing LPG to households, including those benefiting from government initiatives like the Pradhan Mantri Ujjwala Yojana.