LPG distributors shift focus to rural demand as urban orders plateau

Twesh Mishra New Delhi | Updated on April 07, 2020 Published on April 07, 2020

Commercial bookings takes a hit with Covid-19 lockdown

LPG distributors are now shifting focus to rural and Ujjwala consumers as the demand for cooking gas tapers in urban areas amidst the 21-day COVID-19 lockdown.

Demand for liquefied petroleum gas (LPG or cooking gas) had shot up when the 21-day nationwide lockdown was announced. Consumers resorted to panic-buying and pre-booked cylinders, fearing that LPG supplies would be disrupted during the lockdown.

“There was a delay of two days when we initially booked a cylinder refill. It seems that there was too much rush and the distributor also said that he was facing issues getting supplies. But the refill cylinder arrived and there have been no issues since,” Tejveer Singh Kalsi, a Bharat Gas consumer in Lucknow told BusinessLine.

LPG is categorised as an essential commodity and therefore allowed to be distributed during the lockdown.

This approach significantly pushed up demand for cooking gas refills (usually for 14.2 kg cylinders used in households). To regulate the surge, public sector undertaking (PSU) oil companies has restricted refills to once in 15 days for each consumer.

“There is ample supply of petroleum products in the country. As far as LPG supplies are concerned, everything is absolutely under control, we have enough stocks in the country and supply lines are functioning efficiently. There is absolutely no need to panic,” Sanjiv Singh, Chairman, IndianOil, had said in a video message.

Chandra Prakash, President, All India LPG Distributors Federation, said that there was a spurt in LPG demand when the lockdown was declared. On average, LPG demand was up 25-30 per cent. In some areas, it was higher than that. “But then as supplies reached consumers, the demand for fresh refills tapered,” he added.

According to Prakash, there is now (during April) a dip in fresh refills as most consumers are yet to finish the cooking gas cylinders that were supplied to them last month. “There was panic-buying, but the government, companies and distributors managed it adequately. Most cylinder reached recipients within 48 hours of being booked,” he said.

The demand for commercial LPG cylinders (19 kg) has taken a hit because of the Covid-19 lockdown. “Commercial demand for LPG cylinders is down to just 5-10 per cent. Those still buying commercial cylinders are take-away restaurants and government establishments like hospitals and essential services. Some private consumers who are still buying are involved in manufacturing essential goods like masks, sanitisers and food processing,” Prakash said.

Manpower issues

The distributors are also facing some issues with manpower migrating from urban settlements.

“Yes, there has been a manpower shortage as 20-30 per cent labourers opted to leave for their home towns from metro cities. But it seems that the urban demand for LPG has been satiated, and now the focus is on supplying LPG cylinders to PMUY (Pradhan Mantri Ujjwala Yojana – providing LPG connections to women in BPL families) beneficiaries. This will easily make up for the dip in demand that is being noticed in April. There shouldn’t be a manpower shortage as there is lesser noticeable migration from rural India.”

Published on April 07, 2020

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