New Delhi, March 12 – The government has approved a compensation of ₹30,000 crore for the fiscal year 2025-26 to public sector oil companies – Indian Oil, Bharat Petroleum, and Hindustan Petroleum – for supplying LPG at subsidized prices, the Parliament was informed on Thursday.
The retail selling price of a 14.2 kg domestic LPG cylinder is currently ₹913 in Delhi.
Following a targeted subsidy of ₹300 per cylinder to low-income consumers under the Pradhan Mantri Ujjwala Yojana (PMUY), the Centre is providing 14.2 kg LPG cylinders to them at an effective price of ₹613 per cylinder (in Delhi), according to Minister of State for Petroleum and Natural Gas, Suresh Gopi, in a written reply to a question in the Lok Sabha.
To increase the availability of domestic LPG, the Ministry has directed all domestic oil refineries and petrochemical complexes to channel C3 and C4 streams towards LPG production and supply them exclusively to public sector oil companies. These orders have been issued under the Essential Commodities Act, the minister said.
Gopi also stated that the government, through a Special Purpose Vehicle called Indian Strategic Petroleum Reserve Limited (ISPRL), has established strategic petroleum reserves with a total capacity of 5.33 Million Metric Tonnes (MMT) of crude oil, which will help to mitigate disruptions 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 public sector oil marketing companies make 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.
The Central government reduced excise duty on petrol and diesel by ₹13 and ₹16 per litre 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 ₹2 per litre each. However, in April 2025, when excise duty on petrol and diesel was increased by ₹2 per litre each, this was not passed on to consumers, the minister said.
