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regular-article-logo Tuesday, 23 April 2024

Refiners to get Rs 20000 crore to cover LPG loss

PM approves one-time grant to three oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd

Our Special Correspondent New Delhi Published 13.10.22, 01:23 AM
Between June 2020 to June 2022, the international prices of LPG soared around 300 per cent.

Between June 2020 to June 2022, the international prices of LPG soared around 300 per cent. Representational picture

A one-time grant of Rs 22,000 crore will be extended by the government to three state-owned fuel retailers to cover for the losses they incurred on selling domestic cooking gas LPG below cost in the last two years, I&B minister Anurag Thakur said here on Wednesday.

The Union cabinet headed by Prime Minister Narendra Modi approved the one-time grant to three oil marketing companies — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), Thakur told reporters.

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The grant will be for covering the losses they incurred on selling LPG below cost to consumers from June 2020 to June 2022.

The three firms sell domestic LPG at government-regulated prices to consumers. Between June 2020 to June 2022, the international prices of LPG soared around 300 per cent.

However, to insulate consumers from fluctuations in international LPG prices, the cost increase was not fully passed on to consumers of domestic LPG, an official statement said.

Accordingly, domestic LPG prices have risen only 72 per cent during this period, it said, adding this led to significant losses for the three firms.

“Despite these losses, the three PSU OMCs have ensured continuous supplies of this essential cooking fuel in the country. The government has therefore decided to give a one-time grant to the three PSU OMCs for these losses in domestic LPG,” it 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 consumers for domestic LPG.

The government provides cooking gas subsidies through schemes such as the Direct Benefit Transfer for LPG (DBTL), Pradhan Mantri Ujjwala Yojana (PMUY) and Pradhan Mantri Garib Kalyan Package (PMGKP).

As of August 2022, the oil ministry has approved the release of an additional 60 lakh LPG connections under PMUY (Ujjwala 2.0).

Against this, OMCs have released 50.87 lakh connections so far.

“This decision will help the PSU OMCs to continue their commitment to the Atmanirbhar Bharat Abhiyaan, ensuring unhindered domestic LPG supplies and also supporting the procurement of Make in India products.”

Railway bonus

The cabinet also approved the payment of productivity-linked bonuses (PLB) to railway employees for the financial year 2021-22.

The payment is made each year during the Pujas.

This year, too, the productivity linked bonus amount equivalent to 78 days’ wages has been paid to about 11.27 lakh non-gazetted Railway employees.

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