Cabinet Approves Compensation To Public Sector Oil Marketing Companies

The Union Cabinet on 8 July 2025 approved to compensate public sector oil marketing companies for the under-recoveries incurred on the sale of domestic LPG. A total of ₹ 30,000 crore will be compensated to Indian Oil Company Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) by the Ministry of Petroleum and Natural Gas in twelve tranches.

The need to compensation has arisen due to the continued high prices of LPG internationally during 2024-25. While prices continued to fluctuated internationally, IOCL, BPCL AND HPCL managed to insulate the domestic consumer, incurring losses themselves in the process. The compensation will help the companies to meet their critical requirements such as crude and LPG procurement, servicing of debt, and sustain their capital expenditure, to ensure an uninterrupted supply of LPG.