New Delhi, March 12 The Government has approved a compensation of Rs 30,000 crore in FY 2025-26 to the public sector oil companies -- Indian Oil, Bharat Petroleum, and Hindustan Petroleum -- for supplying LPG at subsidised prices, the Parliament was informed on Thursday.
The retail selling price of a 14.2 Kg domestic LPG cylinder is currently Rs 913 in Delhi.
After a targeted subsidy of Rs 300 a cylinder to poor consumers under Pradhan Mantri Ujjwala Yojana (PMUY), the Centre is providing 14.2 Kg LPG cylinders to them at an effective price of Rs 613 per cylinder (in Delhi), Minister of State for Petroleum and Natural Gas Suresh Gopi said in a written reply to a question in the Lok Sabha.
To augment domestic LPG availability, the Ministry has directed all domestic oil refineries and petrochemical complexes to channel C3 and C4 streams towards LPG production and supply the same exclusively to public sector oil companies. These orders have been issued under the Essential Commodities Act, the minister said.
Gopi also said that the government, through a Special Purpose Vehicle called Indian Strategic Petroleum Reserve Limited (ISPRL), has established strategic petroleum reserves facilities with a total capacity of 5.33 Million Metric Tonnes (MMT) of crude oil, which will help to tide over the disruption in supply chains due to the Iran war.
The minister further stated that the prices of petrol and diesel in the country are market-determined and the public sector oil marketing companies take appropriate decisions on the prices of these fuels.
However, the government makes fiscal interventions whenever necessary to calibrate the tax structure applicable to petroleum products to help reduce the burden on consumers.
Central Excise duty was reduced by the Central government by a total of Rs 13 per litre and Rs 16 per litre on petrol and diesel, respectively, in two tranches in November 2021 and May 2022, which was fully passed on to consumers. In March, 2024, OMCs reduced the retail prices of petrol and diesel by Rs 2 per litre each. But in April 2025, when excise duty on petrol and diesel was increased by Rs 2 per litre each, it was not passed on to consumers, the minister said.
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