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PSU Dividend Payouts to Centre Nearly Double Since 2020; 5 Fuel Companies Contribute Over 40%

Written by: Team Angel OneUpdated on: 21 Jul 2025, 8:02 pm IST
PSU dividends to Centre rise to ₹74,017 crore in 2024-25, with over 40% from 5 key fuel firms amid crude price drop and high dividend mandates.
PSU Dividend Payouts to Centre Nearly Double Since 2020; 5 Fuel Companies Contribute Over 40%
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The Government of India has nearly doubled its earnings from Public Sector Undertakings (PSUs) since 2020, now collecting ₹74,017 crore in 2024-25, as per The Hindu report. A major share, more than 40%, comes from just 5 large fuel PSUs as the Centre shifted focus to dividends due to a slowdown in disinvestment.

Massive Rise in Dividends From Fuel PSUs Since 2020

Dividend inflows from central government-owned non-bank PSUs jumped from ₹39,558 crore in 2020-21 to ₹74,017 crore in 2024-25. A significant portion came from Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL), whose payouts surged 255% between 2022-23 and 2024-25. Benefiting from a 65% fall in global crude prices, these firms posted stronger profits but passed just a 2% drop to consumers through petrol price cuts.

Government Strategy of High Dividends 

The Centre adopted a more deliberate approach post-pandemic, using dividends to offset slower progress on asset sales. As per official policy revisions shared in November 2024, each Central PSU must now deliver at least 30% of its Profit After Tax or 4% of its net worth as dividends, whichever is higher. This has positioned dividend receipts as a consistent revenue stream for the exchequer.

Read More: ONGC Plans New 200,000-240,000 BPD Refinery Project in Jamnagar, Gujarat!

Crude Oil Price Drop Aids PSU Profitability

IOC and BPCL saw input costs decline sharply after crude prices dipped from $116 per barrel in June 2022 to $70 per barrel by July 2025. However, the retail price of petrol remained nearly unchanged, registering only a ₹1.95 decline. This profitability gap allowed for enhanced dividends without impacting retail fuel prices considerably.

Dividend Mandate as Policy Tool

The Department of Investment and Public Asset Management (DIPAM) directed CPSEs in 2024 to prioritise dividend payments. These guidelines promote fiscal balance while maintaining investor confidence and supporting government budgetary needs.

Conclusion

The surge in dividends from major PSUs, especially fuel companies like IOC and BPCL, reinforced the government’s revenue amidst disinvestment delays. With strong profitability and supportive policies, Central PSUs have delivered growing returns to the exchequer since 2020.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.

Published on: Jul 21, 2025, 2:32 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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