Govt Unveils Plans to Give LPG Subsidy Worth ₹35,000 Crore to Fuel Retailers

The government is set to provide a subsidy of ₹35,000 crore to state-owned enterprises , which includes Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL). This is being done to compensate for the losses the company has incurred during this financial year.

The three fuel enterprises have kept the price of domestic LPG at ₹803 per 14.2-kg cylinder, which has remained unchanged since March 2024, despite a rise in input materials. This in turn led to under-recoveries, thereby hitting hard on their revenues in the first half of FY25.

As of now, total Under-recoveries for current fiscal stand at ₹ 40,500 crore. Against this amount the government is likely to provide a cover of ₹35,000 crore in a span of two financial years, sources said.

While IOC, BPCL and HPCL are expected to get ₹10,000 crore in FY25, the remaining amount will be disbursed in the upcoming FY26, the companies said. Provision for subsidy is likely to be made in the upcoming budget.

Under-recovery of LPG fuel stands at ₹240 per 14.2-kg cylinder, sources said.

Notably, the government regulates LPG prices to protect domestic households from surging market prices.