HPCL takes to LPG auto-booking of cylinders to fuel refill demand

Distributors say consumers reluctant to accept cylinders not booked by them

Facing flak over the declining number of liquefied petroleum gas (LPG) cylinder refills under the Pradhan Mantri Ujjwala Yojana (PMUY), the government-controlled oil-marketing company Hindustan Petroleum Corporation (HPCL) has started the auto-booking of cylinders for inactive connections.

According to industry estimates, the company has auto-booked, without consumers' knowledge, the first refills of at least 25 per cent of its customers, or about 5 million, under the PMUY, under which free cooking gas connections are given to poor families. 

Of the 80.3 million consumers who have got LPG connections under the PMUY, over 20 million are covered by HPCL. An official source confirmed the practice of auto-booking, stating that it was part of an "outreach programme and was done to educate people". An emailed questionnaire to the company spokesperson remained unanswered.

“HPCL is doing the auto-booking of cylinders, which is causing difficulty for distributors as well. Many consumers are reluctant to accept the cylinder which was not booked by them,” said Pawan Soni, general secretary, Federation of LPG Distributors of India. 

A survey report by the National Statistical Office (NSO) last month said only 61 per cent of the total households in India used LPG for cooking in 2018.

“The undelivered auto-booked refills also create a fake backlog, adversely affecting the star rating of the distributor, which attracts a heavy penalty and, in some cases, the termination of licences,” said another distributor. The fear of penalty has compelled some distributors to sell cylinders in the open market, resulting in forced diversion and the misuse of subsidy deposited under direct benefit transfer (DBT).

The auto-booking of cylinders also leads to a situation where subsidy is being transferred to the account of the beneficiary, while the cylinder is being used by someone else. The government is estimated to spend Rs 32,989 crore on LPG subsidy in the current financial year.

According to the Ministry of Petroleum and Natural Gas, at least 87 per cent of PMUY beneficiaries have come in for at least a second refill. To address the issue of low refills, oil-marketing companies introduced the swap facility of 5 kg cylinder against the 14.2 kg cylinder. 

An official said one major reason for a large chunk of PMUY consumers not coming for subsequent refills had been the lack of awareness of the process of refill booking, and auto-booking was a measure taken by the company to create that awareness.

Based on the November data available with the Petroleum Planning and Analysis Cell, there are 274 million LPG consumers in India. Of this, 75 million consumers are being serviced by HPCL, while IndianOil has 129 million and Bharat Petroleum Corporation has around 70 million. Prior to the PMUY, the bookings through Interactive Voice Response System (IVRS) or SMS used to be in the range of 65 per cent.

According to the government data, LPG connections are available to 96.5 per cent people, compared to 61.9 per cent in 2015-16. The number of distributors too increased by 35 per cent to 24,127 during the same period. The Ujjwala scheme was launched in May 2016 with an initial target of providing free connections to 50 million consumers. Following its success, the scheme was extended to 80 million at a budgetary requirement of Rs 12,800 crore.