Bharat Petroleum Corporation Ltd. (BPCL) is in talks with the Central government regarding compensation for its under-recoveries on the sale of domestic LPG (Liquefied Petroleum Gas) below the market prices amid the West Asia crisis, with the firm expecting a compensation of Rs 633 crore per month till October, according to an NDTV Profit report that cited a company statement
The oil and gas company stated that it was confident of government backing regarding LPG losses, due to the fact that the firm has been selling its domestic LPG, petrol, and diesel below the market prices
This development comes amid the ongoing conflict between Iran and the US in West Asia, which led to a choking of the Strait of Hormuz, through which 20 per cent of the world’s oil and gas exports transit during normal times. This had led to a spike in global crude and gas prices.
BPCL’s LPG compensation buffer was at Rs 15,804 crore as of June 30. This buffer includes an adjustment for Rs 7,594 crore. The public sector oil company expects the government to continue its LPG compensation schemes, in line with past practices.
The Central government informed the Lok Sabha on July 23 that state-run oil marketing companies are still under a lot of pressure due to high crude oil prices and LPG under-recoveries amid continuous geopolitical concerns in West Asia.
Brent oil prices “continue to heavily fluctuate and have increased again,” Minister of State for Petroleum and Natural Gas Suresh Gopi said in a written reply. The crisis in West Asia “has not abated and the resultant geopolitical situation is highly volatile”.
According to the minister, the public sector oil marketing companies have incurred huge losses on the sale of petrol, diesel, and LPG.
The government claimed that as of June 30, 2026, total under-recovery on the sale of domestic LPG by the public sector oil companies was above Rs 51,000 crore. Additionally, it stated that in July, non-Ujjwala clients received an implied subsidy of more than Rs 500 for each 14.2-kg LPG cylinder.
