Anurag Thakur, the I&B Minister, announced on Wednesday that the government would provide three state-owned fuel dealers a one-time compensation of Rs 22,000 crore to make up for the losses they sustained from selling household cooking gas LPG below cost over the previous two years.
The one-time gift to three oil marketing organisations, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd., was agreed by the Union Cabinet, led by Prime Minister Narendra Modi, at a meeting on Wednesday (HPCL), At a news briefing, Thakur spoke.
The grant will be for covering the losses they incurred on selling LPG below cost to consumers from June 2020 to June 2022.
Between June 2020 to June 2022, the international prices of LPG soared by 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 by only 72 per cent during this period, it said adding this led to significant losses for the three firms.