OMCs To Receive LPG Compensation: Hardeep Singh Puri

OMCs have incurred losses due to keeping LPG cylinder prices artificially low in recent years. Despite a steep increase in international LPG prices — up over 60% in 2023–24 — domestic rates remained largely unchanged, particularly for beneficiaries under the PM Ujjwala Yojana. According to government data, the effective price for PMUY consumers stood at Rs 503 in Delhi, while the actual market-linked price exceeded Rs 1,050 per cylinder.

Estimates suggest that OMCs suffered losses of over Rs 40,000 crore in FY24 alone on LPG sales, in addition to Rs 28,000 crore in FY23. While a one-time support package of Rs 22,000 crore was cleared in 2022, companies have repeatedly flagged that compensation does not fully cover the gap.

The fresh statement from Puri signals a possible resolution ahead of the new Parliament session and can improve the balance sheets of these oil retailers, whose profits have been volatile in the face of price freezes and rising crude benchmarks.

Beyond compensation, Puri highlighted progress in India's oil and gas infrastructure, noting a near doubling of LPG coverage from 55% in 2014 to nearly 100% today. He also cited expansion of the pipeline network to over 24,000 km and growth in retail outlets to nearly 96,000, with 86% of LPG distributors now in rural areas.

However, the sector continues to face global price pressures, and while petrol and diesel have been deregulated, LPG remains politically sensitive. With the minister's latest assurance, the focus now shifts to the finance ministry for timely disbursal — a move that can stabilise operations for OMCs and ease investor concerns.