CNBC TV-18 Report: Union Cabinet approves one-time payment to Oil Marketing Cos

12 Oct 2022 , 01:30 PM

According to a report from CNBC TV-18, the Union Cabinet approved lump-sum payments to state-run oil marketing enterprises for liquefied petroleum gas (LPG) during its meeting on October 12.

The government is also considering offering state-run OMCs like Indian Oil Corp compensation for their losses.

The decision will probably be formally announced at today’s Cabinet briefing at 3 PM.

According to the report, the finance ministry has approved a cash settlement of Rs22,000 crore.

Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp., the three largest state-run retailers that collectively provide more than 90% of India’s petroleum products, have seen their worst quarterly losses in years as a result of absorbing record global crude prices.

In an effort to slow the rate of inflation, businesses have also held down the price of gasoline and diesel at the pump since early April.

For the fiscal year that ends in March, the government set aside Rs5,800 crore for oil subsidies.

About half of India’s liquefied petroleum gas, which is typically used as cooking fuel, is imported. According to India’s Oil Minister Hardeep Singh Puri, on September 9 the retail price in Delhi climbed by 28% while the Saudi contract price, the import benchmark for LPG in India, increased by 303% over the previous two years.

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