Fuelling worries

Tried booking your regular LPG cylinder with your distributor? There is every likelihood that you will get a standard reply: “You will have to wait. It is going to take time to clear the backlog.”

Most of the time you will end up collecting your cylinder from the agency all by yourself because there is a shortage of delivery boys. Similar problems confront those who have applied for a new connection. Agencies have given endless waiting time. Even if the gas agencies claim they have plugged shortages, very little has been done on the ground.

This is one of the several such fallouts of the recent decision taken by the Centre to limit the number of subsidised LPG cylinders sold to a consumer to six a year.

Problems get knottier when it comes to schools, universities, hospitals, charity centres, religious institutions, police stations, jails and mess of the Defence department, which until now had the privilege to draw LPG cylinders at subsidised rates. They no longer are entitled for any LPG refill at the subsidised price. They have to procure the cylinders at  1,075 each (subject to variation in different states). Earlier, they would procure any number of refills at  399 a cylinder. The ambitious mid-day meal programme in schools, aimed at improving retention rates among children from economically weaker sections, has run into trouble due to the capping of subsidised LPG.

Amid concerns that the mid-day meal scheme could run aground, village heads have already voiced their inability to provide meals, citing “tight budget” as the reason.
Sarfaraj Ahmed, village head of Fazalpur Dhaki village in Bijnaur district of Uttar Pradesh, told Deccan Herald, that he has already exhausted the funds and it will be difficult for him to provide mid-day meals for the rest of the year. “The government will have to evolve some mechanism to solve LPG problem, our expenditure has overshot our budget,” he said.

R N Dutta, Chief Area Manager of Indian Oil Corporation, the country’s biggest supplier of domestic LPG under the Indane brand, insisted that most of the problems would be resolved once the oil marketing companies (OMCs) update the customer database so as to weed out consumers with multiple LPG connections under subsidised category and the government starts direct transfer of cash subsidy to the account of beneficiaries. According to reports, community kitchens in most of the semi-urban and rural areas in north India have already started supplementing domestic fuel with carbon fuels like charcoal, fuel-wood and cow-dung cakes.

But in urban areas with modern, closely-knit, state-of-the-art high rise apartments, use of carbon fuels may not be permitted at all by the civic authorities, compounding problems of these residents manifold.

To add to their woes, there is lack of clarity about how the capping rule would be applied to the reticulated LPG connections or consumers getting piped gas supply directly to their kitchens. In the metros, about 2.4 lakh families in apartment complexes use reticulated LPG connections, which involves a central storage point from where pipelines carry cooking gas to different apartments and usage is metered at every kitchen like the monthly reading of electricity meters. Since reticulated LPG is supplied to several kitchens from a single bank of cylinders, until now it was considered as one account. Now, the oil companies have agreed to supply gas under individual accounts but the entitlement will be fixed based on the number of flats occupied at the beginning of the year or say, in March or April. The onus of reporting the occupancy position lies with the individual apartment’s residents’ associations after taking the written consent of the flat occupants. The problem with this arrangement is, what if a tenant or owner occupies a flat in an apartment complex a month after the capping-year commences.

Oil companies are not clear about this at the moment and may need to look into this.
The cap on numbers may have been arrived at after a survey of consumption pattern of LPG users spread over the country, as the government claims, but the decision has rendered individual and community kitchens almost devoid of their daily fuel and no doubt has raised a household debate. But the fact remains that an average household of three to five persons in urban areas requires more than six cylinders a year. The concern has been voiced by public at large and many political parties are vociferously backing the cause.

Large-scale public protests have been witnessed across the country with people in the colder region of Jammu and Kashmir resorting to no work. The opposition party and erstwhile UPA ally Trinamool Congress has threatened to disrupt the winter session of Parliament on a host of economic reforms adopted by the government in the past weeks. This includes FDI in retail and limiting subsidy on LPG. But, the government has ruled out a roll back of the decision to cap subsidised LPG. It has, however, asked the state governments to increase the number of subsidised refills if they desire.

Following this, most of the Congress-ruled states have announced an additional three cylinders at the subsidised rate, taking the total to nine a year. While BJP-ruled Goa has also raised the cap to nine cylinders, Karnataka has refused to toe the line.

Still, experts feel even this may not help the consumers much as there is a vast quantity of pilferage in the LPG regime. Right from distributors, dealers, stockists to vendors, all survive on the black-marketing of the LPG cylinders. These are booked in the names of consumers registered with them but are sold to anyone who wants them at a premium rate, without any kind of documentary proof.

The domestic LPG cylinders also reach the commercial consumers like eateries, bakeries, industries, hotels etc., which is prohibited. In some cases, domestic LPG is purchased by the consumers, who in turn sell them in the black market.

Black marketing in LPG regime fed so many stomachs, specially of those low-paid workers in the gas agencies that most of them have left their jobs after the tighter control regime on LPG. A vendor said he quit his job because it was impossible to feed a family of five on the regular salary he got from the agency. Dealers commission, which had not been revisited for years, has been revised but it is not sufficient, say the dealers.

The government, on its part, contended that the unsustainable subsidy regime is eating into its resources and giving it little space to think of other development activities. Rising prices of fuel in the global market since early 2000, has rendered energy imports so expensive that it has to resort to domestic energy pricing reforms, ministers in UPA have said on many occasions.

China, the world’s second-biggest oil consumer has reduced it energy imports off late. Indonesia, Nigeria and Iran are some of the countries which have gone in for oil price reforms. India is a net importer of oil and gas and procures over 75 per cent of its consumption from abroad. But, India is also a country with more than 40 per cent of people living below poverty line and the government needs to strike a balance, feel analysts.


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