Hardeep Singh Puri hails Centre's Rs 30000 crore compensation to oil companies for stable LPG prices

New Delhi [India], August 8 (ANI): Union Petroleum Minister Hardeep Singh Puri on Friday hailed the Centre recent decision to pay Rs 30000 crores to oil companies in 12 parts, which has kept prices of Liquefied Petroleum Gas stable in the country.

In a significant decision, the Union Cabinet, led by Prime Minister Narendra Modi, has approved a compensation of ₹30,000 crore to be paid in twelve parts to oil companies that have kept LPG prices stable despite global uncertainty.

Despite a 63 hike in Saudi CP, the Modi government has kept LPG prices stable, insulating mothers and sisters from the price rise. Oil Marketing Companies (OMCs) have suffered heavy losses to make LPG available to kitchens at nearly half the cost at which it is sold in neighbouring countries.

Even when LPG prices soared in the wake of global uncertainty and there was a 63 hike in Saudi CP, PM Narendra Modi kept our mothers and sisters insulated against the price rise and ensured they didnt feel any negative impact. Today, in a big decision taken by the Union Cabinet under the leadership of PM Modi Ji, ₹30,000 crore will be paid in twelve parts to oil companies which have kept the LPG prices stable, Hardeep Singh Puri wrote in an X post.

Hardeep Singh Puri, highlighted the government efforts to make LPG affordable and accessible to the masses. The decision to compensate OMCs reflects the government commitment to ensuring the financial health of these companies, which play a crucial role in the energy sector.

Puri highlighted that the Oil Making Companies incurred losses to make LPG available in every household at a lower price compared to other neighbouring Indian countries.

Our energy sector OMCs suffered heavy losses to make LPG available to the kitchens at nearly half the cost at which it was being sold in the countries in our neighbourhood, the X post said.

The Modi government decision to compensate OMCs for stable LPG prices demonstrates its focus on providing affordable energy to citizens, particularly in difficult geopolitical times. This move is expected to support the financial health of OMCs and ensure the continued availability of LPG at affordable prices.

The Union Minister said that the fund of Rs 30000 will support the financial health of the OMCs and ensure the availability, affordability and sustainability of energy supply for the citizens of the country.

The compensation, which will be divided amongst the three energy sector OMCs, will support the financial health of these companies which ensure availability, affordability and sustainability of energy supply for the citizens of the country in difficult geopolitical times and uncertainties. In the last 11 years of Modi Government, we have witnessed a major transformation in India energy landscape, with special focus on providing access to clean energy to the masses, Hardeep Puri wrote on X.

More than 10.33 crore Ujjwala families can cook food at just ₹6 per day due to affordable fuel. About 56 lakh domestic LPG cylinders are delivered every day, and around 6 crore consumers visit retail outlets daily across the country.

India sells LPG at the cheapest prices in the world despite being an importer. More than 10.33 crore Ujjwala families are able to cook food at just Rs 6 per day due to affordable fuel. About 56 Lakh domestic LPG cylinders are delivered every day and about 6 cr. consumers visit retail outlets every day across the country and to strengthen availability of fuel in rural areas, of the total LPG distributors added during the last decade, around 86 are rural distributors, the X post read.

The Union Minister said that Public Sector Undertaking OMCs have suffered loss appros Rs 41000 crores in the financial year 2024-25. He stated that the fund of Rs 30000 will reimburse the losses faced by the PSU OMCs.

By making LPG available at a price lower than cost, the PSU OMCs have suffered under-recoveries to the tune of approx. ₹41,000 crore during FY 24-25. Through this Cabinet proposal, it is proposed to seek approval of the Government for partial reimbursement (i.e. ₹30,000 crore) to the PSU OMCs against the under-recoveries already made by them, the X post read.

Highlighting India increased LPG network, the Union Minister mentioned that 3000 km LPG have been laid across the country since 2014.

The LPG pipe network has also been strengthened. LPG Pipelines of ~3000 kms laid since 2014. While Kandla-Gorakhpur LPG pipeline is the world largest LPG pipeline ~2805 KM, and Paradip-Haldia-Motihari of ~1707KM is under construction, Puri wrote on X.

Domestic LPG Cylinders are supplied at regulated prices to consumers by the public sector Oil Marketing companies namely, IOCL, BPCL, HPCL.

The international prices of LPG remained at high levels during 2024-25 and continue to remain high. However, to insulate consumers from fluctuations in international LPG prices, the increase in cost was not passed on to consumers of domestic LPG which led to significant losses for the three OMCs. Despite the losses, the Public Sector Oil Marketing Companies have ensured continuous supplies of domestic LPG in the country at affordable prices.

This compensation will allow the OMCs to continue meeting their critical requirements such as crude and LPG procurement, servicing of debt, and sustaining their capital expenditure, thereby ensuring uninterrupted supply of LPG cylinders to households across the country.

This step also underlines the Government commitment to protect consumers from volatility in global energy markets while maintaining the financial health of these PSU OMCs. It also reaffirms the objective of ensuring the widespread availability of clean cooking fuel to all consumers of domestic LPG, including those under flagship schemes like PM Ujjwala Yojana. (ANI)

Disclaimer: This news article is a direct feed from ANI and has not been edited by the News Nation team. The news agency is solely responsible for its content.