LPG price cut can save Rs 18,500 crore for Indians, but who will compensate for it?
After announcing a reduction of Rs 200 per cylinder on Tuesday, the government is likely to freeze LPG prices for the remaining seven months of the fiscal year, saving customers about Rs 18,500 crore, reported TOI. Despite the cut, state-run fuel retailers are left with an estimated profit of more than Rs 100 per domestic refill.
The government has decided to compensate them for any possible losses after reconciling the accounts for the year, sources told TOI.
OMCs are estimated to have made a combined profit of ₹22,100 crore in the April-June quarter, higher than ₹20,800 crore in the January-March period and a loss of ₹18,500 crore in the year-ago quarter, ICICI Securities said in a report recently.
Oil Minister Hardeep Singh Puri in television interviews on Wednesday said the three oil marketing companies cut the prices as “good corporate citizens” and the extension of “very healthy profits” of April-June (the first quarter of the current fiscal) in the following months will help their decision.