11-08-2025
Indian Government allocates Rs300bn to compensate oil marketing companies
The Indian Government has sanctioned Rs300bn ($3.4bn) to three state-run oil marketing companies (OMCs), Indian Oil, Bharat Petroleum and Hindustan Petroleum, to cover losses from under-recoveries on domestic liquid petroleum gas (LPG) sales.
This financial support will be distributed in 12 tranches and aims to ensure the OMCs can continue to provide LPG at regulated prices despite high international rates, according to a report by
The Ministry of Petroleum and Natural Gas is tasked with the allocation of funds among the OMCs.
International prices of LPG have remained high and the government has chosen not to transfer the increased costs to consumers, leading to significant under-recoveries by the OMCs.
Despite these losses, Indian Oil, Bharat Petroleum and Hindustan Petroleum have maintained a steady supply of LPG cylinders throughout the nation.
The compensation is seen as a crucial step in enabling the OMCs to manage essential expenditures including crude oil and LPG procurement, debt servicing and capital investments.
This move is also aligned with the government's commitment to providing clean cooking fuel to all households, including those under the Pradhan Mantri Ujjwala Yojana scheme, and to uphold the financial health of public sector oil companies amidst global energy market fluctuations.
India has recently reiterated its plan to continue oil imports from Russia, despite potential repercussions suggested by US President Donald Trump.
The US has threatened a 25% tariff on Indian exports and additional sanctions should India persist in acquiring Russian arms and oil.
However, Indian Government sources have indicated that there are no immediate plans to alter the standing long-term contracts with Russia.
"Indian Government allocates Rs300bn to compensate oil marketing companies" was originally created and published by Offshore Technology, a GlobalData owned brand.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
