The Hindu Business Line : Oil cos’ bid to curb subsidised LPG misuse partly successful

The ratio of commercial LPG sales now stands at 12 per cent of domestic in Bangalore followed by seven per cent in Tamil Nadu and six per cent in Kerala

Pratim Ranjan Bose

Kolkata, Nov. 17 The North-South divide may come in the way of the PSU oil companies’ effort to prevent diversion of subsidised domestic LPG for commercial use.

According to sources in IndianOil — controlling over 50 per cent of the LPG market — while the drive has already increased the use of commercial LPG in the states like Tamil Nadu, Kerala and Karnataka; there is hardly any improvement in usage pattern in Bihar, UP, Punjab and West Bengal.

Thanks to high conversion rates, the ratio of commercial LPG sales now stands at 12 per cent of domestic in Bangalore followed by seven per cent in Tamil Nadu and six per cent in Kerala. On the contrary, the ratio is less than two per cent in Bihar and Punjab and a little over two per cent in Bengal.

“The success or failure of this effort is highly proportional to the support we receive from the corresponding state governments,” the source said. Illegal use of domestic LPG takes place mostly at the commercial establishments (like hotels and restaurants) and auto-rickshaws.

“It is difficult to enforce the law in both these cases without adequate State support,” the source said.

“There have been cases in the recent past when our officers were hounded for nabbing such illegal users of domestic LPG in the Northern Indian states, following which we have become more cautious,” he added.

The source, however, added that following the control order issued a few months back, the oil companies have started sharing the connection profiles to curb issuing of multiple connection (by different companies) against the same person or family.

Oil industry takes a hit of about Rs 8,000 crore annually against subsidy offered on domestic LPG. The subsidy element varies depending upon the international price of LPG and varied between Rs 140 and Rs 190 per cylinder, during the last fiscal.

To increase the use of auto LPG, IOC has plans to increase the number of such dispensers from 128 to 200 during the current fiscal. The company booked a profit of Rs 20 crore on sale of auto LPG last year.

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