OIL & GAS

Oil Marketing Companies made lower LPG subsidy pay-out

Oil marketing companies (OMCs) such as Indian Oil and Bharat Petroleum disbursed lower amounts towards LPG subsidy during the just concluded financial year. This is going by the information — on subsidy payouts by the OMCs — furnished by the Petroleum and Natural Gas Ministry to a Right to Information (RTI) Act query posed by this reporter.

According to the information provided by the Ministry, in the first ten months of the financial year 2020-21, Indian Oil Corporation Ltd. released ₹3,008.44 crore as subsidy to its customers of domestic LPG cylinders. In contrast, the firm had disbursed ₹13,048.41 crore and ₹18,662.81 crore as the LPG subsidy in the financial years 2019-20 and 2018-19, respectively.

“The government continues to modulate the effective price to consumer for subsidised domestic LPG,” Minister for Petroleum and Natural Gas Dharmendra Pradhan told parliament in a written reply in March. The government calculates the subsidy on domestic LPG differently for different regions. The subsidy is transferred to consumers by the three public-sector oil marketing companies that sell LPG cylinders.

These subsidy transfers have plunged since the Coronavirus outbreak. In the first eleven months of the financial year 2020-21, Bharat Petroleum Corporation Ltd. disbursed ₹3,629.6 crore as the LPG subsidy.

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