The Hindu Business Line : Monitoring mechanism for distribution of LPG cylinders tightened

IN order to curb the growing instances of black marketing of domestic gas cylinders and ensuring easy availability to genuine customers, the Ministry of Petroleum and Natural Gas has worked out a tighter monitoring mechanism for distribution of cylinders.

Official sources said here today that to monitor and minimise unauthorised usage of domestic LPG, Oil Marketing Companies (OMCs) had started strict scheduling and monitoring of supplies to their distributors. Now, based on the market-to-market demand and consumption, supplies of the cylinders are made.

Further, an audit on consumption, based on the demand in a particular area is made and then supplies are sent. So far there was no such cap. However, there are no instructions to public sector oil marketing companies to slow down the delivery of gas cylinders to customers, the sources emphasised.

Explaining what had prompted this move, official sources said that based on long-term trends, oil-marketing companies had estimated the national average consumption per family of five persons to be about 10 kg per month — a 14.2 kg cylinder may last for about 40 days. However, it varied from market to market and season to season. Against this norm, and taking into account the growth in customer base, it was noted that there had been a spike in the growth of domestic LPG consumption, which could be only accounted for by unauthorised used of subsidised domestic LPG.

The growth rate in consumption increased from 8.6 per cent in 2002-03 to 13.4 per cent in 2003-04 and further to 17.5 per cent during April-June 2004. This phenomenal jump in June 2004 had prompted the marketing companies to monitor supplies to their distributors, the sources said.

Domestic LPG is subsidised by the Government and lately, public sector oil companies have also been absorbing some of the increase in international prices. Based on February 2005 international prices of LPG, the total subsidy of domestic LPG work out to Rs 96.20 per cylinder of 14.2 kg. "Thus, while ensuring easy availability of LPG to genuine customers, it was necessary to monitor that the subsidised product is not diverted for unauthorised usage, such as commercial purposes and automobiles, including auto-rickshaws," the sources added.

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