The Government is considering approval of Rs 30,000-35,000 crore compensation for the Oil Marketing Companies to compensate their losses due to Ujjawala subsidies on LPG cylinders. This is as per a CNBC TV-18 report.
The Ministry of Petroleum and Natural Gas has, however, not released any official confirmation on the matter.
The Cabinet is scheduled to meet today, and the subsidy to the gas companies could be cleared in the meeting. Public sector OMCs like Bharat Petroleum, Hindustan Petroleum and Indian Oil Corporation are in focus as their losses on the sale of LPG cylinders continue to rise.
As per the CNBC-TV18 report, the gas companies are selling the LPG cylinders below their cost price. In FY25, the gas companies incurred losses of Rs 41,000 crore on the sale of LPG cylinders.
While the centre has raised the LPG cylinder prices by Rs 50, the gas companies continue to incur a loss of about Rs 200 per cylinder.
Payment process
According to the CNBC-TV18 report, the centre is likely to make payments of Rs 30,000 crore in tranches over the year. The companies will not have to wait for the end of the financial year for a one-time payment.
As per the latest update on August 8, the cabinet has approved a subsidy of Rs 12,000 crore on LPG cylinders.