Few dealers monopolize LPG trade
Against Requisite 1700 Distributors Valley Has Just 43
Srinagar, Oct 22: While the latest cap by Government of India on supply of subsidized LPG cylinders to the consumers has hit the Valley badly, the genesis of the lingering cooking gas crisis in Kashmir lies in limited number of dealers in the summer capital.
The restricted number of LPG dealers, who monopolize the supply of cooking gas in the Valley, is in fact the major contributory factor to the problem haunting the consumers here.
Surprisingly, there are only 43 gas dealers operating in the Valley while as per all –India norms there should have been around 1700 distributors here to cater to the requirement of 10 lakh LPG consumers. As per the current dealer-consumer ratio, every dealer in the valley on an average caters to around 23,000 consumers while as per all-India norms a dealer has to cater to 600 consumers.
Catering to such a massive number of consumers makes the dealers to earn huge profits out of the cooking gas business that is why they don’t allow any new dealerships to be allotted in the valley. “The dealers are entitled to a profit margin of Rs 37 per LPG cylinder and normally each gas dealer sells around 600 to 1000 cylinders a day. That means they earn more than Rs 20, 000 per day,” said an official of CAPD adding that they (gas dealers) fear if more dealers join the market their huge earnings will drop.
Three oil companies namely Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Limited (BPL) and Indian Oil Corporation (IOC) distributing LPG in the Valley, have, for unknown reasons, failed to open new outlets in the Valley over the years. While HPCL has 26 outlets, OIC has nine and BP seven in the summer capital. Around 80 percent of the Valley consumers are registered with HPCL. “With just 26 outlets catering to a huge number of consumers, people with HPCL connections are the worst sufferers,” the official said.
Experts raise serious questions over the “dismal” ratio between number of dealers and consumers. “How can just 43 outlets distribute cooking gas to nearly 10 lakh consumers,” they said, adding that the meager number of dealers also means that the verification process will take months together besides causing lot of inconvenience to the consumers.
Well-informed sources attribute the non-opening of new LPG outlets to a nexus between the existing dealers and the management of the oil companies. According to these sources, the existing dealers sabotage any attempt aimed at opening more LPG outlets in the Valley as they are making huge money out of the trade and want to monopolize the cooking gas supply.
“Any increase in number of dealers will decrease the profit margin of the existing gas dealers and at present they (existing gas dealers) are ruling the roost in the market and dictate terms,” sources said and added that these “blue-eyed” gas dealers are also allegedly involved in creating artificial shortage of cooking gas to multiply their profits.
Pertinently, in 2007 oil companies had invited tenders for allotting new dealership in the Valley. “But the existing gas dealers created obstacles for oil companies in increasing the number of dealers forcing them to shelve the tendering process,” an executive of an oil company told Greater Kashmir. He said bringing number of dealers in the Valley at par with the national average would not only help tide over the LPG crisis in the valley but also create direct and indirect employment for thousands of youth.
“The chief minister should intervene in this serious issue and call a meeting of oil companies on priority to see how the number of dealers could be increased on priority,” the oil company official said.
With the documentation process for LPG connections being streamlined, the number of consumers in the valley is going to shoot up from the existing 10 lakh necessitating new LPG dealerships.
“With new registrations going on consumer number is going to go up in coming months and therefore need for more dealers,” an official of CAPD said.
Interestingly, the Central government launched Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY) in October 2009.
The scheme is aimed at setting up small size LPG distribution agencies to increase rural penetration and to cover remote as well as low potential areas (locations having potential of 600 cylinders (refill sales) per month.
Pertinently, after new LPG policy came into effect, the cap on subsidized LPG cylinders has been fixed at six cylinders a year.
After the consumption of six subsidized cylinders, consumers have to pay non – subsidized rates of cooking gas cylinders, which will be notified by oil companies keeping in view fluctuating crude oil prices in international market.
Meanwhile, Qamar Ali Akhoon, Minister for Consumer Affairs and Public Distribution said: “Oil companies have been asked to expedite process of allotting gas dealership and every block should have at least one dealer for smooth LPG distribution.”
Lastupdate on : Mon, 22 Oct 2012 21:30:00 Makkah time
Lastupdate on : Mon, 22 Oct 2012 18:30:00 GMT
Lastupdate on : Tue, 23 Oct 2012 00:00:00 IST
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