Cabinet decision. Govt grants ₹22,000 crore to oil PSUs to cover LPG losses

The Union Cabinet on Wednesday approved a one time grant of ₹22,000 crore to State-controlled oil marketing companies (OMCs) for losses in the supply of domestic liquefied petroleum gas (LPG).

“It will help the PSU OMCs to continue their commitment to Atmanirbhar Bharat Abhiyaan, ensuring unhindered domestic LPG  supplies,” the government said in a statement.

LPG prices have gone up by around 300 per cent in many countries, but in India the prices have not gone up that much. The Oil Marketing Companies of PSUs have incurred ₹22,000 crore on LPG between June 2020 to 2022. The government is giving a one time grant to OMCs including IOC, BPCL and HPCL so that no burden falls on the common man, Information & Broadcasting Minister Anurag Thakur said.

Domestic LPG prices are based on Saudi Contract Price (CP), the benchmark for international prices of LPG, and the government continues to modulate the effective price to consumer for domestic LPG.

Government provides LPG subsidy through Direct Benefit Transfer for LPG (DBTL), Pradhan Mantri Ujjwala Yojana (PMUY) and Pradhan Mantri Garib Kalyan Package (PMGKP) subsidies. 

As of August, 2022, the MoPNG has approved the release of additional 60 lakh LPG connections under PMUY (Ujjwala 2.0). Against this, OMCs have released 50.87 lakh connections so far.

LPG beneficiaries 

The 9.34 crore beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY) scheme consumed around 31.47 crore refills of LPG in FY22.

The cumulative domestic LPG consumption stood at 140.93 crore in FY22. Similarly, during FY21, FY20 and FY19, the total refills stood at 156.76 crore, 143.92 crore and 132.63 crore, respectively.

In May, the government said it will give a subsidy of ₹200 per gas cylinder (upto 12 cylinders) to the nine crore beneficiaries of PMUY in FY23. Per capita consumption of PMUY beneficiaries also increased from 3.01 in FY20 to 3.66 in FY22, the minister said.