Shares of India’s state-run oil marketing companies (OMCs) — Hindustan Petroleum Corporation Ltd. (HPCL), Bharat Petroleum Corporation Ltd. (BPCL), and Indian Oil Corporation Ltd. (IOC) — were trading lower by up to 3% on Monday, March 10.The decline follows the government’s decision to exclude LPG compensation in the second supplementary demand for grants.
The Ministry of Petroleum and Natural Gas (MoPNG) had requested ₹35,000 crore in LPG compensation for FY25. In the first nine months of FY25 (9MFY25), OMCs reported total LPG under-recoveries of ₹29,223 crore, with Q3FY25 witnessing a 67% surge in such losses.
A response from the oil and finance ministries is awaited.
Speaking to CNBC-TV18, Union Minister Hardeep Singh Puri said the government is committed to compensating losses of OMCs. “Even when we got it from ₹28,000 crore there was an under-recovery on LPG, we gave them ₹22,000 crore.”Puri said, “Don’t need a budgetary provision, can go to the Finance Ministry otherwise.”
The Ministry of Petroleum and Natural Gas (MoPNG) had requested ₹35,000 crore in LPG compensation for FY25. In the first nine months of FY25 (9MFY25), OMCs reported total LPG under-recoveries of ₹29,223 crore, with Q3FY25 witnessing a 67% surge in such losses.
A response from the oil and finance ministries is awaited.
Speaking to CNBC-TV18, Union Minister Hardeep Singh Puri said the government is committed to compensating losses of OMCs. “Even when we got it from ₹28,000 crore there was an under-recovery on LPG, we gave them ₹22,000 crore.”Puri said, “Don’t need a budgetary provision, can go to the Finance Ministry otherwise.”
“If OMCs behave like good corporate citizens and have under recoveries, we are committed to compensate them,” the minister added.
In 2022, the government had granted ₹22,000 crore in compensation to OMCs for a cumulative loss of ₹28,000 crore. Oil Secretary Pankaj Jain had earlier said that the MoPNG had urged the finance ministry to provide compensation for LPG under-recoveries.
On the NSE, IOC shares closed 2.52% lower, while BPCL and HPCL declined by 1.70% and 1.94%, respectively.
