The Petroleum Ministry budget remains overwhelmingly subsidy-driven. A one-time grant of Rs 175 billion has been provided in 2026–27 to public sector oil marketing companies (OMCs) to compensate for under-recoveries on domestic LPG sales, following a Rs 125 billion provision in the revised estimates for 2025–26.
In addition, total LPG subsidy outgo, including direct benefit transfer and connections to poor households, stands at Rs 110.845 billion in 2026–27. An extra Rs 10 billion is to be met from the Oil Industry Development Fund to finance LPG connections for poor households.
Biofuels get a sharper push from a low base
Biofuels emerge as one of the few areas seeing a meaningful increase in budgetary support. Allocations for the Pradhan Mantri JI-VAN Yojana, which supports advanced bioethanol projects, have been raised to Rs 1969 million in 2026–27 from Rs 379 million in the previous year’s revised estimates.
Support for biomass collection has also been increased to Rs 1 billion from Rs 100 million, pointing to a renewed focus on feedstock availability for bioenergy programmes, albeit from a relatively small base.