The government will give Rs 30 thousand crore to the oil companies to compensate for the loss incurred by selling LPG cylinders at subsidized rates. This amount will be given to the companies in 12 installments. Apart from this, Rs 12,000 crore has also been approved for the subsidy of Ujjwala Yojana. Today, i.e. on 8th August, it has been approved in the Union Cabinet meeting.
Domestic LPG cylinders in India are sold by government oil companies like IOCL, BPCL and HPCL. These cylinders are available at regulated prices fixed by the government. That is, their prices are not determined by the market, but the government controls them.
LPG prices have remained high in the international market for a long time. This caused huge losses to the oil companies. They had to buy LPG at expensive prices, but had to sell it at cheaper prices. This loss is called under-recovery, that is, the amount that the companies could not get from the sale.
The government has approved Rs 12,000 crore to continue the subsidy of the beneficiaries of Ujjwala Yojana in 2025-26. The beneficiaries of this scheme get a subsidy of Rs 300 on a 14.2 kg LPG cylinder. 9 cylinders can be taken in a year.
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