The oil ministry is planning to allocate Rs 44,000 crore as compensation to state-run oil companies for the losses they’ve been bearing by promoting home cooking gas at below-market charges, a report by The Financial Occasions reported, quoting folks conscious of the matter.
The petroleum and pure fuel ministry would allocate the quantity that might offset the losses of oil advertising and marketing corporations on LPG gross sales in FY22 and FY23 and supply subsidies to Ujjwala clients this yr, folks conscious of the event informed ET,
They added that the proposal by the oil ministry would possible be finalized quickly and despatched to the finance ministry.
This comes as the speed of home LPG was elevated by Rs 50 per cylinder once more on Wednesday; in Delhi, a 14.2 kg-cylinder now prices Rs 1,053.
In a single yr, the charges of a non-subsidised LPG cylinder have elevated by Rs 244 or 30 per cent. Whereas cooking gas costs have risen eight occasions within the final yr, they haven’t been in sync with the fee.
The Middle stopped offering cooking gas subsidies quickly after the Covid-19 pandemic outbreak. The federal government lately introduced the resumption of subsidy for Ujjwala clients at Rs 200 per cylinder.
In FY22, the federal government had spent practically Rs 200 crore on LPG subsidy and this yr, it has allotted Rs 4,000 crore.
The compensation by the central government could be a big reduction to oil companies which were tolerating the market shocks by retaining the home charges of cooking fuel decrease than the worldwide costs.
The folks conscious of the matter informed ET that the good points from the lately imposed windfall tax on oil producers and gasoline exporters would possible assist to lift assets for the upper cooking gas subsidy,
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