Cabinet approves ₹30,000 crore LPG subsidy for state-run oil companies

In a move to stabilize domestic fuel prices and support state-run firms, the Union Cabinet on Friday approved a ₹30,000 crore LPG subsidy for state-owned oil marketing companies (OMCs). Union I&B Minister Ashwini Vaishnaw announced that the decision aims to keep LPG prices affordable for middle-class families, who have been insulated from the effects of high global gas costs. The subsidy will be disbursed in 12 installments to Indian Oil, Bharat Petroleum, and Hindustan Petroleum, with the Ministry of Petroleum and Natural Gas determining the share for each company.

The compensation package comes as a response to the fact that global LPG prices have remained elevated since 2024–25. To protect consumers from this volatility, the OMCs absorbed significant losses while continuing to supply domestic LPG at affordable rates. The government stated that the financial support will help these companies meet essential expenses like crude and LPG procurement, debt servicing, and capital expenditure, thereby ensuring a continuous supply of LPG cylinders to households across the country.

In a separate but related move, the Cabinet also approved ₹12,060 crore in support for beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) for the fiscal year 2025-26. This initiative will provide a targeted ₹300 per cylinder subsidy to over 10.33 crore households under the scheme. Launched in 2016, the PMUY provides deposit-free LPG connections to adult women from poor households and is a key government program to promote the use of clean cooking fuel.