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Sell domestic LPG only to PSU oil firms: Govt to producers

All domestically produced LPG should necessarily be sold to PSUs for subsidised sale to consumers

Press Trust of India  |  New Delhi 

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Liquefied petroleum gas (LPG)

The government has ordered producers like to supply all the cooking gas (LPG) they produce locally to state-owned oil companies only, and private retailers have been asked to source their requirements through imports.

The Ministry of Petroleum and Natural Gas, in an order issued this month, stated that "sale of indigenously produced is not permitted to the entities other than government oil companies."

All domestically produced liquefied petroleum gas (LPG) should necessarily be sold to PSUs for subsidised sale to consumers.

While India is surplus in refining capacity, it does not produce enough to meet all of its demand. It imported 8.7 million tonnes of in 2015-16 and 4.66 million tonnes in first half of current fiscal. is produced by both public sector firms like Indian Oil Corp Ltd (IOC) as well as private firms like Ltd.

The ministry said instances have been noticed of all locally produced not being sold to oil marketing companies - IOC, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL).

"...Some domestic is also being sold to parallel marketeers in violation of Ministry's order," it said. "All domestic producers of need to ensure compliance with provisions of (Regulation of Supply and Distribution) Order, 2000 and (Regulation of Use of Motor Vehicles) Order, 2001 and sell domestically produced only to government oil companies."

Ministry held that sale of by domestic producers to anyone other than state-owned oil marketing companies (OMCs) is not permissible under control order.

Non-state sellers, called parallel marketeers, cannot source the fuel from domestic refiners. They have to import if they intend to sell the cooking fuel in domestic market.

It asked all producers including Oil and Corp (ONGC), Ltd and RIL as well as parallel marketeers to comply with the order.

RIL, the largest single location producer in the country, had in 2013 contested the ministry view, saying rules do not mandate that all domestic must be sold only to state firms.

However, the government's top law officer, Solicitor General of India (SGI) backed the ministry's view.

The control order of 2000 defines parallel marketeer as someone who is carrying on business of importing, storing, transporting, marketing and distributing of It does not prohibit the parallel marketeer from producing but it cannot sell such production directly to consumers.

Last year, the ministry had permitted RIL to sell up to 10,000 tonnes of per month for one year to parallel marketers on condition that it will import an equivalent quality and deliver to state-owned firms.

There are a total of 183 parallel marketers in the country.

First Published: Tue, November 29 2016. 16:20 IST