NEW DELHI: The oil marketing companies (OMCs) might have to absorb the Rs 200 a cylinder price cut in cooking gas (LPG) announced by the government on August 29, 2023. According to a report citing sources in the petroleum ministry, the bumper earnings in the first five months of the current fiscal and international benchmark coming off its highs will help state-owned OMCs to meet this expense. It means the government may not compensate the oil companies for reduction in LPG price.
After the reduction, the 14.2 Kg LPG cylinder price will come down to Rs 903 from Rs 1,103 earlier in Delhi. Similarly, for Ujjwala beneficiaries, a cylinder will cost Rs 703. Meanwhile, all the three state-owned OMCs, Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) posted a healthy growth in the last two quarters. For instance, IOCL posted a net profit of Rs 13,750.44 crore, BPCL Rs 10,644 crore and HPCL a net profit of Rs 6,203.90 crore.
In October 2022, the government had announced a one-time grant of Rs 22,000 crore to OMCs to cover for the losses they had incurred on selling LPG at below cost in the previous two years. In an interview, petroleum minister Hardeep Singh Puri said OMCs have demonstrated a healthy performance in the first quarter of fiscal 2023, and are projected to display a positive and reassuring performance in the second quarter as well. The companies initially incurred a loss, they recovered from it later, supported by the government.
The minister also urged the non-BJP states to cut value added tax (VAT) on petrol and diesel. “Least which Congress can do is to join the Raksha Bandhan celebrations and reduce VAT on petrol and diesel in the states where it has governments, instead of ascribing imaginary reasons to PM Narendra Modi’s decision to reduce cost of LPG cylinders by Rs 200 as a festive gift for our sisters!,” tweeted the minister.