The government has approved a one-time compensation of Rs 22,000 crore to oil companies to cover losses

A one-time award will be made to three oil marketing companies: Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL). Consumers are sold domestic LPG at government-regulated pricing by the three companies.

The Centre announced a significant relief for state-run oil corporations on Wednesday, approving a one-time settlement of Rs 22,000 crore for them. The decision was made during a Cabinet meeting presided over by Prime Minister Narendra Modi.

"LPG costs are rising all around the world. Oil Marketing Companies of Public Sector Undertakings have been handed a one-time gift of Rs 22,000 crore to ensure that the burden of rising prices does not fall on ordinary people, according to Union Minister Anurag Thakur at a media briefing following the Cabinet decision.

Three oil marketing corporations will get the one-time grant: Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL). Consumers are sold domestic LPG at government-regulated pricing by the three companies.

International LPG prices increased by roughly 300 percent between June 2020 and June 2022.

However, in order to protect customers from volatility in international LPG prices, the cost rise was not entirely passed on to local LPG consumers, according to an official statement.

As a result, domestic LPG prices rose by just 72% throughout this time, resulting in considerable losses for the three companies.

"Despite these losses, the three PSU OMCs have guaranteed that this important cooking fuel is available throughout the country. As a result, the government has decided to provide a one-time grant to the three PSU OMCs for their domestic LPG losses "It stated.

The Union Cabinet authorised a Rs 22,000 crore one-time payout to the three oil marketing corporations (OMCs).

"This decision would assist the PSU OMCs in maintaining their commitment to the Atmanirbhar Bharat Abhiyaan by assuring uninterrupted domestic LPG supply and promoting the acquisition of Make in India products."