The Hindu Business Line : Oil PSUs curb commercial usage of subsidised LPG

Sources in oil PSUs said that growth of LPG consumption had declined from as high as 11 per cent to just 4.8 per cent during January-February this year following imposition of strict supply norms, primarily on refilling of existing connections at the distributor level.

Overall, oil PSUs have sold 90,89,000 tonnes of LPG till February this year against 82,74,000 tonnes during the corresponding period in the last fiscal, resulting in a drop in growth of sales from 11.4 per cent to 9.8 per cent.

While the financial impact of the drop in sales is yet to be ascertained, sources in Indian Oil confirmed that the company had averted losses by preventing misuse of the subsidised product.

The market share (inclusive of Assam oil division) in the domestic LPG sector had come down marginally from 48.3 per cent to 48 per cent.

The share had dropped irrespective of a rise in sales from 39,92,000 tonnes to 42,24,000 tonnes during April-February this fiscal.While the oil PSUs have been successful in restricting their losses on LPG transactions, the losses due to subsidised kerosene have gone up due to the relief work taken up following the tsunami disaster.

It may be mentioned that the companies have imposed a strict supply management system from last year to check illegal diversion of subsidised kerosene.

According to sources, against 3.4 per cent negative growth in February 2004, oil PSUs had registered 4.4 per cent growth in kerosene sales during the same period this year.

Indian Oil alone had registered 4.5 per cent sales growth against a negative growth of 3.3 per cent in February 2004.

During April-February this year, the PSUs together registered 1.9 per cent drop in sale of kerosene against a 3.2 per cent drop during the same period last year.

Retail sales of diesel have also shown negative growth in February this year.

There has been lower agricultural demand this year.

"Normally, demand from agriculture grows in the dry season primarily to run pumps. However, unseasonal rain in North India has led to reduced use of pumps," IOC sources said.

The sources also attribute the fall in demand to lower inventory maintained by dealers who were expecting a cut in duty in the Union Budget.

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