Government reviews finances of oil marketing companies to settle LPG under-recovery payments

Business Business: Government officials aware of the matter told Moneycontrol that the government is evaluating the financial position of state-run oil marketing companies (OMCs) before finalising compensation for losses incurred by refiners on sale of LPG cylinders. Based on the assessment, the government may partially compensate the OMCs for the losses incurred or even reject the request completely, sources said. “The oil ministry had sent its (compensation) proposal. Now it is up to the finance ministry. They are looking at everything; the health of the companies, current prices, etc. They will decide on how much compensation should be given to the companies. It has also happened in the past that companies have been asked to bear the entire loss,” said one of the sources. The companies and the oil ministry have been eyeing the said compensation from the Centre since Union Budget 2025. Before Union Budget 2025, the Ministry of Petroleum and Natural Gas (MoPNG) had requested the finance ministry for full compensation of LPG losses incurred by OMCs.