In the current fiscal, this is the second instance of the government announcing a reduction in LPG prices for households.
Public sector oil marketing companies (OMCs) – Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Indian Oil Corporation – will absorb the financial impact of the Rs 100-per-cylinder reduction in cooking gas prices announced on Friday, reported The Indian Express citing highly placed sources in the government.
The centre does not plan to compensate them for it, the report added.
On Saturday, the OMCs reduced the price of liquefied petroleum gas (LPG) for all domestic LPG consumers by Rs 100 per 14.2-kg cylinder in line with the announcement of Prime Minister Narendra Modi that cooking gas prices were being lowered on the occasion of the International Women’s Day on Friday.
This price cut by the government comes just days ahead of the likely announcement of the Lok Sabha Elections 2024. This decision of the Modi government is likely to benefit about 33 crore households across the country.
“There is no thinking within the government to compensate the OMCs for the LPG price reduction,” said a senior government official, requesting anonymity, reported The Indian Express.
Given the strong financial health of the three companies at present, they should be able to absorb the hit rather comfortably as they had the necessary headroom to accommodate the price cut, said officials with the oil marketing companies.
In the first three quarters of the current financial year 2023-24 (FY24), all three OMCs reported robust earnings.
In the current fiscal, this is the second instance of the government announcing a reduction in LPG prices for households. On August 29, ahead of the Assembly elections in five states, a price cut of Rs 200 per cylinder was announced.
Source:financialexpress.com