Distribution handicaps a hurdle for Centre's LPG Ujjwala scheme

After the success of PMUY, LPG coverage in India increased from 56% in 2014 to 94.3% by April 2019

The slow pace on the part of state-run oil-marketing firms (OMCs) in giving cooking gas distributorships, as well as new distributors not being allowed to serve customers more than 15 km away, is affecting the Pradhan Mantri Ujjwala Yojana (PMUY). The government in June asked LPG distributors to serve only those who fell within 15 km. For any customer beyond this limit, a distributor has to take permission from the district administration. 

“Our per capita distribution has declined because the number of PMUY refills is as low as 3 per year. Hence, we have suggested that all customers beyond 15 km should be transferred,” said Pawan Soni, general secretary, Federation of LPG Distributors of India.

According to latest government estimates, more than 57 per cent of distributors are serving PMUY beneficiaries up to 92 km. 

“The estimates were based on a sample that the government has taken to assess the progress of the scheme. Covering such a large distance has resulted in delay of supply to Ujjwala beneficiaries,” said a source close to the development. 

Some families below the poverty line (BPL) are paying extra charges to get a cylinder because they were outside the 15 km zone. The latest data with the Petroleum Planning and Analysis Cell (PPAC) shows India has 266 million liquefied petroleum gas (LPG) connections, while the number of distributors is just 23,776. This includes 11,977 distributors of Indian Oil Corporation, 5,928 of Bharat Petroleum Corporation and 5,871 of Hindustan Petroleum Corporation.

Going by this, there is only one distributor in place for 11,188 consumers. Following the success of the PMUY, the LPG coverage in India increased from 56 per cent in 2014 to 94.3 per cent by the end of April this year. The government came up with a notification for commissioning new distributors in 6,347 locations of the country. Of these, only 3,610 have been commissioned so far, and the rest are stuck in procedural bottlenecks. 

According to an industry source, consumers can opt to shift their connection from one dealer to another. Even after the government asking for transferring Ujjwala consumers to the nearest distributor, neither the companies nor the distributors have changed the distributors. OMCs have been told to allow intra- and inter-company transfers, based on current applications, by July 31 this year.

At present, there is an in-built dealer commission of Rs 50 attached to the bill and up to 15 km there is a minimal transport charge too. On the other hand, beyond 15 km and up to 30 km, consumers will have to pay additional delivery charges. When asked about the reasons for delay in allotting distributorships, a senior oil-marketing company official told Business Standard the companies were in the process of doing it and would complete the process soon. “Our aim is to extend the reach of the scheme,” he said.