| Company | Value | Change | %Change |
|---|
As Indian Oil Corporation (IOC) forms over 50% of total LPG under-recoveries with ₹8,870 crore for H1 FY25, the firm will be the biggest beneficiary if the Finance Ministry approves compensation for LPG under-recoveries.
Hindustan Petroleum Corporation Limited’s (HPCL) under-recoveries for the first half of the fiscal amount to ₹4,500 crore and Bharat Petroleum Corporation Ltd’s (BPCL) stand at ₹4,120 crore.
Sources had last month told CNBC-TV18 that the Oil Ministry has sought over ₹25,000 crore as compensation for LPG under-recoveries and that the issue was to be discussed within the administrative ministry.
With LPG prices still administered, OMCs have a case to seek compensation, government sources had told CNBC-TV18 on November 5.
In recent investor calls, both IOC and HPCL reiterated their expectation for government support, stating, “As LPG is a controlled product, we expect the government to compensate for under-recoveries.”
The petroleum ministry had told oil companies in April 2020 that if the market-determined price of an LPG cylinder is less than the effective cost to the consumer, OMCs will retain the difference in a separate buffer account for future adjustments.
Currently, all OMCs have a negative buffer on domestic LPG cylinders as the retail selling price/effective cost to consumer is less than the market-determined price with no pass-through of higher international LPG prices.
