Cylinder cap pulls down LPG sales

From Sep 2012 to Jan 2013, OMCs registered negative growth of 1.8% as compared to growth of 6.9% during Sep 2011 to Jan 2012

The ministry of petroleum and natural gas has said that following the decision to go for a cap on domestic LPG cylinders, has led to a 1.8% drop in domestic LPG sales from September 2012 to January 2013, compared to a 6.9% growth during the same period last year.

The cap was implemented with effect from September 14 last year. During the period from September 2012 to January 2013, OMCs registered a negative growth of 1.8%, as compared to a growth of 6.9%, during September 2011 to January 2012 in domestic LPG. On the other hand they have registered a growth of 12.5% during the September to January period, against 5.4% growth in corresponding period of previous year in sales of industrial LPG (NDNE).

In a written reply to the Lok Sabha, the minister of state for petroleum and natural gas, P Lakshmi, said that the   Public Sector Oil Marketing Companies (OMCs) — Indian Oil Corporation Limited (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) — have estimated that 90% of cylinders will be sold at subsidized rates and annually only 10% of cylinders will be sold at market prices at current cap level of 9. This would translate into a saving on fiscal subsidy and under recoveries of around 0.92 crore cylinders at Rs.503.58 per cylinder. OMCs, she added, have reported that they are meeting the genuine demand of the customers registered with them.