New Delhi The Union cabinet on Friday approved ₹42,060 crore under two separate heads for supplying cheaper cooking gas to about 330 million Indian households, including 103.3 million poor families in the current financial year.
The cabinet, chaired by Prime Minister Narendra Modi approved ₹30,000 crore budgetary support to state-run oil marketing companies for providing subsidised cooking gas to the middle-class households (in the past) and ₹12,060 crore to continue supporting the beneficiaries of the Pradhan Mantri Ujjwala Yojana in FY26, information and broadcasting minister Ashwini Vaishnaw said.
“PM Ujjwala yojana is globally recognized as one of the biggest examples of inclusive growth,” he said, adding that the scheme involved a total expenditure of ₹52,000 crore till 2024-25 since it was launched by the Prime Minister in 2016.
As approved on Friday, the scheme will provide targeted subsidy of ₹300 per 14.2 kg cylinder for up to nine refills per year to the beneficiaries in 2025-26. PMUY consumers would have the option to buy smaller cylinders of 5kg, with proportionately pro-rated subsidy.
The other expenditure of ₹30,000 crore pertained to compensation to the three public sector oil marketing companies (OMCs) – Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — to make up their revenue losses incurred on the sale of cooking gas (also called domestic LPG) to Indian households.
“The distribution of the compensation within the OMCs will be done by the ministry of petroleum and natural gas. The compensation will be paid in twelve tranches,” an official statement issued by the Cabinet said. Domestic LPG cylinders are supplied at regulated prices to consumers by the three public sector OMCs. The government insulates consumers from fluctuations in international LPG prices.
As high international LPG rates were often not passed on to consumers, it led to significant losses for the three OMCs. “Despite the losses, the public sector oil marketing companies have ensured continuous supplies of domestic LPG in the country at affordable prices,” the statement added. This compensation will allow the OMCs to continue meeting their critical requirements such as crude and LPG procurement, servicing of debt, and sustaining their capital expenditure, thereby ensuring uninterrupted supply of LPG cylinders to households across the country, it added.
This step also underlines the Government’s commitment to protect consumers from volatility in global energy markets while maintaining the financial health of these PSU OMCs. It also reaffirms the objective of ensuring the widespread availability of clean cooking fuel to all consumers of domestic LPG, including those under flagship schemes like PM Ujjwala Yojana (PMUY), the statement said.
PMUY was launched in May 2016 with an objective to provide a LPG connection to adult women from poor households across the country. As on July 1, 2025, there are about 1103.3 million PMUY connections across the country, the statement said.
India imports about 60% of its LPG requirement.
