Centre allocates Rs 30K cr to support LPG subsidy

New Delhi: The Centre has approved a compensation of`30,000 crore in FY 2025-26 to public sector oil marketing companies for supplying LPG at subsidised rates, Parliament was informed on Thursday.

The financial support will be provided to Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited to offset losses incurred on domestic LPG sales. The current retail price of a 14.2 kg domestic LPG cylinder stands at`913 in Delhi.

Minister of State for Petroleum and Natural Gas Suresh Gopi said in a written reply in the Lok Sabha that under the Pradhan Mantri Ujjwala Yojana, poor households receive a targeted subsidy of`300 per cylinder.

After the subsidy, beneficiaries pay an effective price of`613 for a 14.2 kg cylinder in Delhi.

To boost domestic LPG availability, the government has directed all domestic oil refineries and petrochemical complexes to divert C3 and C4 hydrocarbon streams towards LPG production. The supply will be routed exclusively to public sector oil companies. These directions were issued under the Essential Commodities Act, the minister said.

Gopi also noted that India has established strategic petroleum reserves through the Special Purpose Vehicle Indian Strategic Petroleum Reserve Limited with a total storage capacity of 5.33 million metric tonnes of crude oil. These reserves are aimed at ensuring energy security and mitigating supply disruptions amid the ongoing Iran war. He further stated that petrol and diesel prices in India are market-determined, with oil marketing companies taking pricing decisions. However, the government intervenes through fiscal measures when required to ease the burden on consumers.

The Centre earlier reduced excise duty on petrol and diesel in November 2021 and May 2022, while oil companies also cut fuel prices by`2 per litre in March 2024. However, a`2 per litre excise duty increase in April 2025 was not passed on to consumers.