Overview

• The Finance Ministry is preparing a Rs 30,000–35,000 crore package for Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum to cover their FY25 under-recoveries on LPG sales.
• The plan relies on about Rs 32,000 crore in annualised revenue from the April excise duty hike on petrol and diesel.
• State-run oil firms incurred cumulative losses of roughly Rs 40,500–41,000 crore in fiscal 2024-25 by selling LPG below international benchmarks.
• Officials are finalising modalities to route the excise proceeds through the Consolidated Fund of India before placing the proposal before the Union Cabinet.
• Once disbursed, the compensation funds can be used by OMCs for capital expenditure or other operational priorities.