The government is likely to provide a subsidy of Rs 35,000 crore to state-owned Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) to make up for losses they incurred on selling the fuel this fiscal, sources said.

ET Year-end Special Reads Buying a home in 2025? Here's how property market can shape up 18 top stock picks for 2025 from 6 leading brokers Five big bangs that shook the corporate world in 2024 The three fuel retailers have kept the price of domestic LPG unchanged at Rs 803 per 14.2-kg cylinder since March 2024 despite a rise in input raw material cost.

This led to under-recoveries on LPG sales, and the resultant drastic fall in their earnings in the April-September (first half of current 2024-25 fiscal year). The total under-recovery on LPG sales for the industry in the current fiscal is estimated at about Rs 40,500 crore.

Against this, the government is likely to provide Rs 35,000 crore in total spread over two financial years, two sources with knowledge of the matter said.

IOC, BPCL and HPCL are likely to get Rs 10,000 crore during the current 2024-25 fiscal and the remaining Rs 25,000 crore in the next, they said, adding that provision of the subsidy is likely to be made in the Union Budget for 2025-26 that Finance Minister Nirmala Sitharaman will present on February 1. Sources said there is an under-recovery (or loss) of about Rs 240 per 14.2-kg cylinder that the state-owned fuel retailers sell to domestic households at the current price of Rs 803. Artificial Intelligence(AI) Java Programming with ChatGPT: Learn using Generative AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Basics of Generative AI: Unveiling Tomorrows Innovations By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Generative AI for Dynamic Java Web Applications with ChatGPT By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Mastering C++ Fundamentals with Generative AI: A Hands-On By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Master in Python Language Quickly Using the ChatGPT Open AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Performance Marketing for eCommerce Brands By - Zafer Mukeri, Founder- Inara Marketers View Program Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance A2Z Of Money By - elearnmarkets, Financial Education by StockEdge View Program Marketing Modern Marketing Masterclass by Seth Godin By - Seth Godin, Former dot com Business Executive and Best Selling Author View Program Astrology Vastu Shastra Course By - Sachenkumar Rai, Vastu Shashtri View Program Strategy Succession Planning Masterclass By - Nigel Penny, Global Strategy Advisor: NSP Strategy Facilitation Ltd. View Program Data Science SQL for Data Science along with Data Analytics and Data Visualization By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) AI and Analytics based Business Strategy By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI View Program Web Development A Comprehensive ASP.NET Core MVC 6 Project Guide for 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Digital Marketing Masterclass by Pam Moore By - Pam Moore, Digital Transformation and Social Media Expert View Program Artificial Intelligence(AI) AI-Powered Python Mastery with Tabnine: Boost Your Coding Skills By - Metla Sudha Sekhar, IT Specialist and Developer View Program Office Productivity Mastering Microsoft Office: Word, Excel, PowerPoint, and 365 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Digital marketing - Wordpress Website Development By - Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert View Program Office Productivity Mastering Google Sheets: Unleash the Power of Excel and Advance Analysis By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development Mastering Full Stack Development: From Frontend to Backend Excellence By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance Financial Literacy i.e Lets Crack the Billionaire Code By - CA Rahul Gupta, CA with 10+ years of experience and Accounting Educator View Program Data Science SQL Server Bootcamp 2024: Transform from Beginner to Pro By - Metla Sudha Sekhar, IT Specialist and Developer View Program You Might Also Like: ATF price cut by 1.5%, commercial LPG rates down Rs 14.5 per cylinder Prices of domestic LPG are regulated by government to insulate domestic households from high market rates.

Regulated prices are lower than the Saudi CP - the international benchmark used to price domestic LPG. This is because domestic LPG production is not sufficient to meet the local demand and the fuel has to be imported.

This leads to under-recoveries and consequent losses to the fuel retailers.

Government from time to time compensates IOC, BPCL and HPCL for these losses.

The three were previously paid Rs 22,000 crore compensation for 2021-22 and 2022-23 fiscal year.

This was against Rs 28,249 crore of under-recovery.

Of the Rs 40,500 crore under-recovery estimated for the current fiscal, IOC is likely to account for Rs 19,550 crore, HPCL Rs 10,570 crore and BPCL Rs 10,400 crore, according to sources.

Domestic LPG prices have remained unchanged since March 9, 2024, when they were cut by Rs 100 per 14.2-kg cylinder just before general elections were announced.

Sources said international LPG prices have remained moderately high in 2024, even during summers, leading to under-recoveries.

The prices are expected to remain elevated during winter months.

To make up for the difference between cost and retail selling price, a Rs 35,000 crore subsidy is likely to be provided, they said, adding that the payout would be together with taxes.

The Directorate General of Goods and Services Tax Intelligence (DGGI) had raised a GST demand on the previously paid under recoveries of Rs 22,000 crore to the three retailers.

And to ensure full payout accrues to the three without any deductions, it is likely that the government may provide for any additional tax liability.