Cabinet approves ₹12,060 crore for PM Ujjwala Yojana in FY26, clears ₹30,000 crore LPG compensation for OMCs

The Union Cabinet has cleared a ₹12,060 crore budgetary outlay for the Pradhan Mantri Ujjwala Yojana (PMUY) for the financial year 2025–26 (FY26). The allocation was already part of the FY26 Budget Estimates.

In addition to the Ujjwala outlay, the Cabinet has also approved ₹30,000 crore as cash compensation for oil marketing companies (OMCs) to cover a portion of their under-recoveries on the sale of domestic LPG.

The ₹30,000 crore compensation will be given as budgetary support, and the first tranche is likely to be reflected in the first Supplementary Demands for Grants during the Winter Session of Parliament or possibly even earlier. The remaining amount could feature in the revised estimates of the Budget.

CNBC-TV18 had earlier reported that the Cabinet was likely to approve this proposal, which follows a recommendation made in April 2025 to seek ₹32,000 crore in compensation for OMCs. At the time, the government had raised excise duty on petrol and diesel by ₹2 per litre to generate additional revenue, reportedly with an eye on offsetting LPG losses.

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