LPG Refill Bookings Go Up

Barely three days into the new financial year, there is considerable action, including some unexpected, in the cooking gas market dominated by public sector oil companies.

Even as many households made a rush to draw the first of the nine subsidised refills they are eligible this fiscal, some others, mainly Indane consumers, who had placed orders last month found that their booking had been cancelled.

As a result, the backlog of refills that prevailed with many Indane distributors last month, and came in the way of thousands of households availing their full quota, came down.

“In March, some distributors were supplying refills in ten days from the date of booking. This meant consumers who had booked towards the end of the month could not be supplied before March 31,” an Indane agent said.

As per the government decision imposing a cap on the number of subsidised cylinders supplied to households, a consumer was eligible for five refills from mid-September to March 31.

This fiscal, they will get nine subsidised refills.

On the reasons for the cancellation, sources in Indian Oil Corporation (IOC), whose Indane brand is the market leader in Tamil Nadu, said the distributors were asked not to use the cash memos generated in March for supplies made in April.

Presumably, this was done as consumers insisted that refill supplied against last month’s bookings should form part of the 2012-13 subsidised cylinder cap.

An official said, while the distributors were asked only to cancel the cash memos, some might have cancelled the booking itself. The cancellation, he said, was also necessitated as many of the households had exhausted the quota of five cylinders and booked non-subsidised domestic cylinders (costing nearly Rs. 500 more).

Since the fresh quota came into force on April 1, their bookings had to be cancelled so that subsidised cylinders, which cost around Rs. 400 each, could be supplied.

Many households were also waiting for 2013-14 as was evident from the increase in refill bookings. An official of Bharat Petroleum Corporation Limited said since Monday the bookings had increased by as much as 25-30 per cent.

The distributors had ordered additional lorry loads (a load consists of a little over 300 cylinders), he said.

Sources in IOC also confirmed the bookings had gone up, but expected them to stabilise shortly. “We expect the bookings to settle in a week. Moreover, it is summer when the demand for LPG is less.”

In Chennai city, there are about 20 lakh Indane consumers. The fact that many did not utilise their full quota of five cylinders by March 31, he said, vindicated the oil companies’ assessment that household required just 7-8 cylinders in a year.

An official of Hindustan Petroleum Corporation Limited, however, said there was no unusual increase in the number of refill bookings.



Govt. Raises LPG Cap To 9 Cylinders Per Year

The Cabinet Committee on Political Affairs (CCPA) on Thursday raised the cap on supply of subsidised LPG cylinders to nine bottles from six per year per household and authorised the oil marketing companies (OMCs) to undertake periodical hike in diesel prices till the Rs. 9.60 paise per litre subsidy is completely wiped out.

However, the CCPA did not take any decision on the proposal of the Petroleum Ministry to hike LPG cylinder prices by around Rs. 50 immediately and then in a phased manner over the next two years to wipe out the nearly Rs. 500 per cylinder subsidy. It also decided not to go with the Petroleum Ministry proposal to hike kerosene oil prices in a phased manner leaving both the commodities of mass consumption untouched.

The CCPA, that met under the leadership of Prime Minister Manmohan Singh, virtually announced the “deregulation’’ of diesel prices thereby authorising the OMCs to hike diesel prices over a period of time to cover up the Rs. 9.60 paise per litre loss being incurred by them. However, Petroleum and Natural Gas Minister, Veerappa Moily refused to share the details or formula for a phased price hike in diesel prices. The Cabinet decision came on the note submitted by the Petroleum Ministry based on the recommendations of the Kelkar Committee which had called for an end to the subsidy regime in the petroleum sector by 2015-16.

As soon as the Cabinet decision came, the marketing departments of the OMCs got down to the business of calculating the proposed hike that is likely to take effect tonight. “We are still awaiting the notification from the government before deciding on the quantum of hike. We have been given a brief on the issue and indirectly we will have to take the consent of the Petroleum Ministry before undertaking any kind of hike in diesel prices,” a senior OMC official said.

Mr. Moily said there will be no change in LPG and kerosene rates. “I am happy to inform the CCPA has decided to raise the cap on subsidised LPG to nine cylinders per household per year from existing six cylinders. Consumers will get a quota of five subsidised cylinders between September 2012 and March 2013 and from April 1, 2013, they will be entitled to nine cylinders per annum.. As far as diesel is concerned, oil marketing companies have been authorised to make price correction from time to time. The price correction could take place commence even from tonight,’’ he added.

But it was left to the Finance Minister P. Chidambaram to clarify the situation and he maintained that the OMCs have been allowed to make `small correction’. “I am looking at same subsidy bill as was expected earlier,’’ he said.

Price of diesel was last revised on September 14 when it was hiked by a steep Rs. 5.63 per litre. At present, diesel costs Rs 47.15 per litre in Delhi. Subsidised LPG costs Rs. 410.50 per 14.2-kg cylinder and any household requirement beyond the new limit of 9 cylinders will cost a near market price of Rs. 895.50 per bottle. The government had in September capped the supply of subsidised cooking gas to six cylinders per household in a year, with a view to checking diversion to unintended

beneficiaries. The increase in the LPG cap would mean an additional subsidy outgo of Rs. 9,300 crore annually.

Petroleum Secretary G. C. Chaturvedi said CCPA has authorised oil firms to make small changes over a period of time. “There was no discussion on the quantum of price increase or the period over which these changes are to be effected. It has been left to the oil companies,’’ he said.

However, he hastened to add that the government had not de-regulated the diesel prices. “If we are to deregulate, then diesel price will have to be raised by Rs 9.60 per litre, which is not the case. Only a small quantum of change has been permitted over a period of time. It cannot even be called partial deregulation,’’ he added.

State-owned oil companies sell diesel at a loss of Rs. 9.60 per litre, kerosene at Rs. 30.64 a litre and LPG at Rs. 490.50 per 14.2-kg cylinder. For the full 2012-13 fiscal, they are projected to lose about Rs. 165,000 crore.

By, The Hindu(http://goo.gl/K4BBX)

Delivery is based on date and not quota

Even as the oil marketing companies (OMCs) marginally reduced the rates of LPG domestic non-subsidised cylinders (Rs. 3), thousands of households who had not exhausted their quota of nine subsidised cylinders will not be able to avail themselves of this benefit, as the OMCs have refused to provide subsidised cylinders of the previous year after the expiry of the March 31 deadline.

The government last year fixed the cap on subsidised cylinders at nine per household a year. Beyond this, consumers would have to buy cylinders at the market rate. As the period between the initial announcement of the cap of six cylinders, which was later raised to nine, came at the middle of last year, many households were unable to finish their quota and had hoped that they would be able to draw their quota even after March 31.

However, in what came as a rude shock to consumers was the decision of the OMCs that consumers will not be entitled to draw their remaining quota in the next financial year.

“We have given clear instructions that the delivery will be based on the date and not the quota. Even if someone has booked a cylinder before March 31 and the delivery takes place in April, it will be counted in the next year’s quota,” a senior OMC official said.

It is understood that almost 5 to 6 per cent of households could stand to lose their quota of subsidised cylinders for 2012-13.

The OMCs have around 14.5 crore consumers all over the country and supply nearly 100 crore cylinders per annum. A 14.2-kg subsidised LPG cylinder is being sold at Rs. 410.50 in Delhi.

Reduction of Rs. 3

The OMCs announced a reduction by Rs. 3 a non-subsidised cylinder in line with fall in international rates. A 14.2-kg LPG cylinder will now cost Rs. 901.50 from Monday.

With crude oil prices easing, the rates were cut to Rs. 904.50 from March 1 and now they been further cut to Rs. 901.50. In Mumbai, a cylinder will cost Rs. 912, against Rs. 919.50 till last month. In Kolkata, the price has been cut by Rs. 6.50 to Rs. 926.50, while in Chennai it has been reduced from Rs. 898 to 891.50. Similarly, losses on sale of LPG at subsidised rates have fallen to Rs. 434.50 a cylinder from Rs. 439.

By: The Hindu

Indane Gas

Indane Gas is a 2nd largest gas agency according to survey in 2010 in India. The launch of LPG in India was in the 1970s. Indane Gas an ideal fuel for modern kitchens.

Why LPG?

  • LPG Gas the clean, efficient and safe cooking fuel to millions of people. Indane gas provides safety, reliability and convenience chullahs which improves health of women in rural areas.
  • Liquid petroleum gas(LPG, GPL, LP Gas)or simply propane or butane which is widely used to replacing chlorofluorocarbons in an effort to reduce damage to the ozone layer.
  • India has so many gas suppliers but the reliable, largest distributor, and fast service provider of LP Gas is Indane Gas supplier.

According to Survey In 2010 :

Number of Users:-5.8 million Indane Gas users in India.

Ranking :- Every 2nd LPG cooking gas connection in India is an Indane.

Highest bottling plant in whole world :- Indane Gas bottling plant situated in Leh having 3500 meters above sea level.

Distribution of cylinders per day :- 1.20 million Gas cylinders