In a significant move aimed at supporting India’s energy security and protecting consumer affordability, the Union Cabinet has approved a ₹30,000 crore subsidy package for Liquefied Petroleum Gas (LPG). The financial aid will be distributed in 12 monthly tranches and is expected to ease the burden on oil marketing companies (OMCs) such as Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation (IOC), and Hindustan Petroleum Corporation Limited (HPCL).
The subsidy comes as a compensation mechanism for the revenue losses suffered by OMCs from selling LPG cylinders at rates significantly lower than market prices. For years, public sector oil companies have absorbed the difference between global LPG costs and government-regulated retail prices, especially under social welfare schemes. The newly approved package will help recover part of these under-recoveries, strengthening balance sheets and enabling future investments in infrastructure and clean energy transitions.
Investor sentiment reacted positively to the announcement. BPCL’s share price climbed up to 2% in intraday trading on the Bombay Stock Exchange following the news. Market analysts attribute the gain to expectations of improved cash flows and reduced debt pressure for the PSU, which has been navigating volatile crude prices and rising global freight costs. “This is a direct earnings boost for BPCL and a signal of policy support for the sector,” said an energy market analyst based in Mumbai.
While BPCL stands to gain, the benefits will extend across the LPG supply chain. The funds will help stabilize domestic supply, ensuring consistent delivery of cylinders to households under flagship schemes such as the Pradhan Mantri Ujjwala Yojana (PMUY). Experts also point out that timely subsidy disbursements can help mitigate working capital stress, especially at a time when global energy markets are experiencing heightened volatility due to geopolitical tensions.
The approval aligns with the government’s broader objective of ensuring universal access to clean cooking fuel. With LPG penetration in Indian households now exceeding 99%, the challenge has shifted from access to affordability. The subsidy not only addresses this gap but also signals continued government backing for state-run energy companies as they balance commercial viability with social responsibility.
Looking ahead, energy policy watchers believe the subsidy will provide OMCs with breathing space to invest in LPG import facilities, bottling plants, and green energy initiatives. However, they caution that long-term sustainability will require gradual price rationalization and efficiency improvements in the distribution network.
For BPCL, the ₹30,000 crore approval offers both immediate relief and a platform to strengthen operations in a rapidly evolving energy landscape.
