Government to Bear LPG Price Cut Burden

New Delhi: Day after the government announced the price cuts on domestic cooking gas cylinders, Minister for Petroleum and Natural Gas Hardeep Singh Puri on Wednesday has affirmed that the government would take the burden of the Rs 200 price cut announced on domestic cooking gas cylinders. The minister has also noted that the Centre and the oil marketing companies (OMCs) need to make joint efforts to economically insulate the common man.

The Union Cabinet on Tuesday had announced the LPG price cut to ease the load of inflation on domestic consumers. The Centre's move had sent initial jitters among the oil marketing companies (OMCs), projecting a cost impact to the tune of nearly Rs 7,500 crore. “It has always been a question as to who will bear the cost impact of a price drop in the energy sector,” he said.

“OMCs have demonstrated a healthy performance in the first quarter of fiscal 2023, and are projected to display a positive and reassuring performance in the second quarter as well. Though they had initially taken a loss, they recovered later, supported by the Centre, said the minister. This, in turn, insulated the nation's economy as well the consumer ecosystem from every kind of macroeconomic shocks,” Puri told a TV channel in an interview.

Puri also added that the Cabinet decision to reduce cylinder prices was taken after consultation with Oil Marketing Companies (OMCs). “Both OMCs and the government have collaborated to make this price cut possible. Have no doubt that OMCs’ good performance in Q1 will continue in Q2 as demonstrated that they are corporate benefit citizens,” he added.