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Cooking gas distributors have sought a 50 per cent increase in the ceiling for refill sales.
They fear that dealership business will take a hit if the Government allows public sector oil marketing companies to expand their network without revising the existing limit on sale of refills.
The ceiling limit was last revised in 2000, based on the Census report of 1991.
“The proposed policy should be so devised that it does not affect the existing network, and at the same time brings about better customer service,” said a distributor, adding that the proposed policy needed to be reviewed, and the expansion plan should be put on hold till then.
The ceiling on refills is based on the population of an area, and has not changed since 2000.
The distributors have made a presentation to the Petroleum and Natural Gas Ministry seeking a 50 per cent hike in ceiling.
Distributors also want the Government to bear in mind the fact that having an LPG distributor in an area where piped gas is available does not make business sense. Therefore, the oil retailers should be rational in deciding the areas for expanding network, a distributor said.
When asked about the distributors’ representation, Petroleum Secretary Vivek Rae told Business Line that, “We have listened to their issues. We are looking at several things and have not reached at a conclusion as of now.”
Last December, the Ministry had asked the oil retailers to appoint 7,000 new regular distributors.
However, after existing dealers opposed the move, the matter was put on the backburner.
This April, the Ministry had again given its go-ahead for appointment of new regular distributors based on a new set of guidelines.
“If the oil marketing companies go ahead with the new guidelines, the existing regular distributors will face a lot of hardship,” said another distributor.
There are nearly 10,500 regular and 2,000 Rajiv Gandhi Gramin LPG Vitaran Yojana distributors throughout country.
The average refill sale per regular distributor is 7,000 a month. About 25 per cent of regular distributors have crossed the existing limit, he added.
According to the dealers, most urban and semi-urban markets have reached saturation and there is no potential for growth unless the ceiling is raised, as it is one of the important constituents for meeting the varying costs of operation in different places/markets, a distributor said.
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