Govt may offer ₹20,000 crore lifeline to Indian Oil, HPCL, BPCL

Govt. plans to pay about ₹20,000 crore ($2.5 billion) to the state-run fuel retailers, such as Indian Oil Corp., to partly compensate them for losses and keep a check on cooking gas prices. The talks are at an advanced stage but a final decision is yet to be taken, as per the reports.

The three biggest state-run retailers, which together supply more than 90% of India’s petroleum fuels, have suffered the worst quarterly losses in years by absorbing record international crude prices. While the handout could ease their pain, it would add pressure to the government’s coffers that are already strained by tax cuts on fuels and a higher fertilizer subsidy to tackle mounting inflationary pressures.

India imports about half of its liquefied petroleum gas, generally used as cooking fuel. The price of Saudi contract price, the import benchmark for LPG in India, has increased 303% in the past two years, while the retail price in Delhi was increased by 28%.

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