Cabinet approves Rs 30,000 crore as compensation to OMCs for LPG losses

Union Minister Ashwini Vaishnaw on Friday announced that the government has approved Rs 30,000 cr as budgetary support to three public sector Oil Marketing Companies (OMCs) for under recoveries.

The said PSUs are Indian Oil Corp., Bharat Petroleum Corp. Ltd. and Hindustan Petroleum Corp. Ltd. who supply LPG cylinders at regulated prices to consumers.

This support is given keeping in mind the current geopolitical scenarios and uncertainties in oil and gas sector, Vaishnaw said. However, Vaishnaw refused to respond to a question on Trump tariffs.


The distribution of the compensation within the OMCs will be done by the Ministry of Petroleum and Natural Gas. The compensation will be paid in twelve tranches, the government said

The international prices of LPG have remained high since 2024-25. To prevent passing the burden of fluctuating prices to consumers, OMCs bore significant losses. Despite this, the public sector OMCs ensured continuous supplies of domestic LPG in the country at affordable prices.

The announced compensation will allow the OMCs to continue meeting their critical requirements such as crude and LPG procurement, servicing of debt, and sustaining their capital expenditure, thereby ensuring an uninterrupted supply of LPG cylinders to households across the country, government said in an announcement.

Also read: Cabinet clears Assam, Tripura development packages, Rs 4,200 cr MERITE scheme

Pradhan Mantri Ujjwala Yojana (PMUY)

The Union Cabinet also approved Rs 12,060 Cr support for PM Ujjwala beneficiaries for FY 2025-26, as it aims to provide a subsidy of Rs 300 per 14.2 kg cylinder. This policy is said to benefit 10.33 Cr households across India (approx 45 Cr citizens).

PMUY, launched in 2016, was started with the aim to provide deposit-free LPG connection to adult women from poor households across the country. As on July 1 2025, there are about 10.33 crore PMUY connections across the country.

In 2024-25, total expenditure under PM Ujjwala Yojana stood at Rs 52,000 cr.