India plans $2.5 billion aid to oil firms hit by soaring costs

India plans to pay about Rs 20,000 crore ($2.5 billion) to the state-run fuel retailers, such as Indian Oil Corp., to partly compensate them for losses and keep a check on cooking gas prices, according to people familiar with the matter.

State oil companies are obligated to buy crude at international prices and sell locally in a price-sensitive market, while private players such as Reliance Industries Ltd. have the flexibility to tap on stronger fuel export markets.