Lok Sabha Question No. 4638 (UNSTARRED), answered on 2025-08-21
Subject: Losses to OMCs
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Shri  Selvaganapathi T.M.

## LOK SABHA UNSTARRED QUESTION NO. 4638 TO BE ANSWERED ON 21 AUGUST, 2025

## Losses to OMCs

4638. SHRI SELVAGANAPATHI T.M.:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether it is a fact that the Public Sector Oil Marketing Companies have suffered a net loss of Rs. 43,000 crore on the gas front;
- (b) if so, the details thereof;
- (c) whether it is also a fact that the increase in the excise duty was raised to compensate for the losses suffered by these companies and if so, the details thereof;
- (d) whether an increase in the excise duty on petrol, diesel and LPG would have no impact on retail prices; and
- (e) if so, the details thereof?

## ANSWER पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũालय मŐ राǛ मंũी ( ŵी सुरे श गोपी )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI SURESH GOPI)

(a) to (e): India  imports  about  60%  of  the  domestic  LPG  consumed.  Price  of  LPG  in  the country  is  linked  to  its  price  in  the  international  market.  While  the  average  Saudi  CP (international benchmark for LPG pricing) rose by 51% (from US$ 385/MT in July 2023 to US$ 582/MT  in  June  2025),  the  effective  price  for  Pradhan  Mantri  Ujjwala  Yojana  (PMUY) consumers for domestic LPG was reduced by 38% (from Rs. 903 in August 2023 to Rs. 553 in July 2025).

During  the  period  2020-21  to  2022-23,  Saudi  CP  (international  benchmark  for  LPG  pricing) went up from $415 per MT to $712 per MT.  However, the increase in international prices was not fully passed on retail prices, due to which the Oil Marketing Companies (OMCs) suffered significant  losses.  To  compensate  the  OMCs  for  these  losses,  Government  paid  a  one-time compensation of Rs. 22,000 crore to OMCs in FY 2022-23.

The  international  prices  of  LPG  again  went  up  during  2024-25  and  continue  to  remain  high. However, to insulate  consumers  from  fluctuations  in  international  LPG  prices,  the  increase  in cost  was  not  passed  on  to  consumers  of  domestic  LPG  which  led  to  significant  losses  for the three  OMCs.  Despite  these  losses,  the  Public  Sector  Oil  Marketing  Companies  have  ensured continuous  supplies  of  domestic  LPG  in  the  country  at  affordable  prices.  To  compensate  the OMCs for these losses, Government has recently approved a compensation of Rs. 30,000 crore to the OMCs.

Petrol and Diesel prices have come down to Rs. 94.77 and Rs. 87.67 per litre respectively (1 st August 2025, Delhi prices) from Rs. 110.04 and Rs. 98.42 per litre in November 2021 as a result of various steps taken by Government and PSU OMCs.

Central Excise duty was reduced by the Central Government by a total of Rs. 13/litre and Rs. 16/litre  on  petrol  and  diesel  respectively  in  two  tranches  in  November  2021  and  May  2022, which was fully passed on to consumers. Some State Governments also reduced state VAT rates to provide relief to citizens. On the other hand, excise duty on Petrol and Diesel was increased by Rs. 2 per litre each in April 2025 but this increase was not passed on to consumers.

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