The Union Cabinet on Wednesday has approved one time compensation to state-owned oil marketing companies (OMCs) for liquefied petroleum gas.
The finance ministry has agreed to ₹22,000-crore cash payout.
IOCL, Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Corp (HPCL) together supply more than 90 per cent of India’s petroleum fuels have suffered the worst quarterly losses in years as it was absorbing record international crude prices.
These three state-run OMCs had in the first quarter of the current fiscal year (April-June) posted a combined loss of ₹18,480 crore due to erosion in the marketing margin on petrol, diesel and domestic LPG.
IOC had reported a net loss of ₹1,995.3 crore for the April-June quarter. HPCL reported its highest ever quarterly loss of ₹10,196.94 crore and BPCL posted a loss of ₹6,290.8 crore.
The three firms have not changed petrol and diesel prices for over six months now, record since daily pricing came into force in 2017, despite high crude oil prices and weak rupee pushing up cost of production.
They have also not changed cooking gas LPG rates.
The government in May cut excise duty on petrol and diesel. This was passed on to consumers instead of being used to square off mounting losses on the fuel sales.
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