In the same meeting, the Cabinet is also likely to approve the subsidy payout under the Pradhan Mantri Ujjwala Yojana (PMUY), a flagship welfare scheme aimed at providing subsidised cooking gas to low-income households.
In July, CNBC-TV18 reported
that the government was looking to approach the Union Cabinet to secure a nod for allocating a fund of ₹32,000 crore to ₹35,000 crore to compensate state-run OMCs for under-recoveries incurred on the sale of subsidised LPG over the last 15 months, citing senior government officials.
Oil marketing companies (OMCs) are estimated to have incurred cumulative under-recoveries of around ₹30,000 crore on domestic LPG sales between April and December 2024. While global LPG prices surged due to supply disruptions and heightened international volatility, retail prices in India remained largely unchanged, putting significant financial pressure on state-run fuel retailers.
Earlier this year, the Ministry of Petroleum sought a ₹40,000 crore compensation package from the Finance Ministry, citing sustained losses from below-market pricing and elevated global energy costs.
Although the Union Budget for FY25–26, presented on February 1, did not include provisions for such compensation, the government raised excise duty on petrol and diesel in April, aiming to generate an additional ₹32,000 crore in revenue.
