LPG cylinder units face HR coils shortage

The manufacturers of LPG cylinders across the country are a harried lot due to short supply of low carbon hot rolled (HR) coils to these units by the steelmakers, both in the private and public sectors.

Industry sources said, Steel Authority of India Limited (SAIL) and Tata Steel, the two leading steel producers in the country, are the major suppliers of low carbon HR coils to the cylinder manufacturing units.

However, supplies have trickled down significantly over the last couple of months, jeopardising the operations of the LPG cylinder units. This also threatens to throw out of gear the Centre’s plan to expedite new LPG connections across the country, especially in rural areas, sources said. The Centre planned to add 55 million new LPG connections throughout the country by 2015.

The LPG cylinder manufacturers alleged that the steel manufacturers who were previously supplying the HR coils directly to the cylinder manufacturing units are now keen on having direct dealings with the oil marketing companies for having greater profit margins.

“We have raised the issue of the problem in supply of HR coils before steelmakers like SAIL and Tata Steel but to no avail. The steel manufacturers are only concentrating on their bottomline without caring for the interests of the society”, said an industry source.

When contacted, Ujjwal Desai, customer account manager of Tata Steel said, “We have not received any complaint regarding the supply of HR coils from those LPG cylinder manufacturers in the eastern region who are our regular customers. Tata Steel’s supply of HR coils has been more than the orders placed by its regular customers.” When contacted SAIL authorities declined to comment on the issue.

According to industry estimates, Indian Oil Corporation Limited (IOCL), the country’s largest oil marketing company has a pan-India requirement of 60 lakh LPG cylinders for a period of 15 months and one lakh tonnes of HR coils are needed to meet this requirement.

Hindustan Petroleum Corporation Limited (HPCL) needs 40 lakh LPG cylinders per year and over 66,000 tonnes of HR coils are needed to meet this requirement.

The requirement of Bharat Petroleum Corporation Limited (BPCL) stands at 23.18 lakh LPG cylinders for a period of 10 months and to fulfill this requirement, 38,635 tonnes of HR coils are necessary.