LPG: Govt strategy backfires

Petroleum Minister Mani Shankar Aiyar on Friday admitted that orders to regulate supply of LPG had led to scarcity of the mass consumed cooking fuel in some parts of the country and the government plans to review the order as it has not been able to check diversion of subsidized fuel.

The government had restricted the number of LPG cylinders per distributor and frozen issue of new cylinders in some areas. This had resulted in households complaining of long waiting period for getting refills.

"(The order) has not been effective in checking diversion and blackmarketing of subsidised LPG cylinders, which are meant only for domestic use and not for commercial use. We need to rethink... we are reconsidering (the decision)," he told reporters in New Delhi.

You may face LPG shortage shortly

Aiyar said subsidised LPG was being diverted for use in commercial establishment, restaurants and automobiles. LPG for commercial use is priced at market rates, which are at least Rs 100 per cylinder more than the retail price of domestic LPG.

"We had taken a conscious decision that we should restrict the number of refills available with the LPG distributor to the customer base in his area. The deliberate restriction was to ensure demand of genuine domestic consumers is met and pilferage checked," he said.

Aiyar said despite the regulation, some areas were facing shortage as LPG distributors continue to divert the cylinders meant for domestic consumers to commercial users.

Ceiling of LPG connection based on the customer database has been set for every distributor and new connections are issued only if the present customer base was lower than the ceiling, he said.

"Distributors can issue new connections till the ceiling (as decided by the customer database). They are not allowed to release new connections if the connection already issued are at the ceiling," Aiyar said.

"Each distributor who has reached his ceiling, will not be allowed to issue new connections," he said.