The Union cabinet has approved a one-time grant of Rs 22,000 crore to three oil marketing companies – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation (HPCL) – to reduce cost pressures and cover the last two years’ losses on selling LPG in domestic market. Information and Broadcasting Minister Anurag Thakur said that the LPG prices rose 300 per cent between June 2020 and June 2022. The grant will aid the fuel retailers to tackle the under-recoveries that surfaced during this two-year period, he said at the briefing after the Cabinet meeting.
The grant comes as the LPG prices were not increased in tandem with the soaring costs, and the cost increase was not fully passed on to the domestic LPG consumers. The domestic LPG prices have risen by 72 per cent during the two-year period. This led to the three public sector undertaking (PSU) oil companies incurring significant losses vis-a-vis market prices. The one-time Rs 22,000 grant is being given to insulate the domestic LPG consumers from the cost increase, Thakur said at the briefing.
The OMCs (oil marketing companies) on October 1 cut the price of 19 kilogram commercial LPG cylinder from Rs 1885 to Rs 1859.5 in the national capital marking the sixth reduction in the price of commercial LPG since June 2022. In all, the rate of the 19 kilogram LPG cylinder has come down by Rs 494.5. However, no reduction was made to the price of the 14.2 kilogram LPG cylinder, which is used in household kitchens, and the rates remained at Rs 1,053.
The Narendra Modi-led cabinet gave a nod to several other provisions This includes the disbursement of productivity-linked bonus of Rs 1,832 crores among 11,27,000 railway employees. The limit of these bonuses is capped at Rs 17,951. In addition to this, the cabinet also approved the central sector scheme, Prime Minister Development Initiative for North-eastern Region (PM-DevINE), which was announced in the Budget 2022. The government has allocated a total of Rs 6,600 crore rupees for the centrally-funded scheme for the period of FY23 to FY26.