BPCL Expects Rs 633 Crore Monthly Compensation Till October To Pare LPG Losses

Bharat Petroleum Corp. Ltd. (BPCL) is in talks with Centre with regards to the LPG (Liquified Petroleum Gas) compensation mechanism, with the firm expecting a compensation of Rs 633 crore per month till October, according to its statement on Tuesday to NDTV Profit.

The oil and gas company stated that it was confident of government backing regarding LPG losses, due to the fact that the firm has been selling its domestic LPG, petrol, and diesel below the market costs. This development comes amid the ongoing conflict between Iran and the US in West Asia, which has closed the Strait of Hormuz. 

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BPCL's LPG compensation buffer was at Rs 15,804 crore as of June 30. This buffer includes an adjustment for Rs 7,594 crore. The firm expects the goverment to continue its LPG compensation schemes, in line with past practices.

The central government informed the Lok Sabha on July 23 that state-run oil marketing companies are still under a lot of pressure due to high crude oil prices and LPG under-recoveries amid continuous geopolitical concerns in West Asia.

Brent oil prices "continue to heavily fluctuate and have increased again," Minister of State for Petroleum and Natural Gas Suresh Gopi said in a written reply. The crisis in West Asia "has not abated and the resultant geopolitical situation is highly volatile."

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According to the minister, OMCs (Oil Marketing Company) in the public sector "have incurred huge losses on the sale of petrol, diesel and LPG."

The government claimed that as of June 30, 2026, PSU OMCs' total under-recovery on domestic LPG was above Rs 51,000 crore. Additionally, it stated that in July, non-Ujjwala clients received an implied subsidy of more than Rs 500 for each 14.2-kg LPG cylinder.

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