The government has taken two important decisions. One is that the losses made from the sale of LPG cylinders at a lower price to the oil marketing companies (OMCs) will be compensated in installments. Apart from this, the number of cylinders found under PM Ujjwala Yojana-PMUY has been reduced from 12 to 9. Talking about compensation for LPG deficit, the cabinet on Friday approved cash compensation of ₹ 30,000 crore under which it will be given to oil marketing companies in 12 installments. The first installment is expected to begin in September-October this year.
What will happen by paying in installments?
Due to the sale of LPG cylinders at a low price, the government will compensate the oil marketing companies in 12 installments. Due to this, in this financial year 2026, oil marketing companies will get ₹ 15 thousand crore and the remaining money will be through the new budget in the next financial year 2027 which will be presented in February 2026. According to CNBC-TV18 sources, the compensation for the compensation to be given in this financial year 2026 can be sought for the evacuation from the emergency fund. Now let’s talk about the losses in installments, if ₹ 30 thousand crores are given to Indian Oil, Bharat Petroleum and Hindustan Petroleum simultaneously, then the fiscal deficit can increase by 8 basis points while the financial effects can be reduced by dividing it in FY 2026 and FY 2027. The government has targeted the financial deficit of 4.4% of GDP for this financial year 2026.
Subsidy will not decrease in PM-ujjwala yojana
The cabinet has reduced the number of subsidized cylinders under the PM-Ujjwala scheme to nine but the subsidy has not been cut. The government has retained a subsidy of ₹ 300 per cylinder on 14.2 kg cylinder, approved the budget allocation of the scheme for FY 2026. According to government data, LPG consumption of the family under the PM Ujjwala scheme has improved, which has increased from an average per capita consumption of three refills in FY 2020 to about 4.47 during FY 2025.