OMCs detect 1.3 mn multiple connections of domestic LPG through web tracking

Web-tracking of domestic liquefied natural gas (LPG) connections has started yielding results with oil marketing companies (OMCs) blocking 1.3 million multiple connections this year. Growth in overall LPG consumption has also fallen to a single digit (6 per cent) in the past few months, which is sharply in contrast to a normal double digit growth even though new connections are being issued.

Formally launched in June this year, the transparency portal allows customers to keep an eye on the number of cylinders sold in their account by the dealer. It empowers companies to get quick data on number of connections a person or a house has and subsidy availed by each consumer. “The portal is helping us in real-time data mining and facilitating the check of multiple connections,” said an IndianOil official.

The three oil marketing companies — IndianOil, Bharat Petroleum and Hindustan Petroleum— had earlier blocked 3.8 million connections by end of previous financial year under a drive that began in May 2010. According to the companies, 27 million of the total 140 million LPG connections in the country are with people who already have one LPG connection.

MULTIPLE TROUBLE

• 27 million of the total 140 million LPG connections are with people already having one connection
• So far, OMC's have disconnected 1.3 million connections
• The total subsidy on domestic LPG was Rs 30,000 crore last financial year
• Decision at capping the number of subsidised cylinders hit a roadblock last year after protest by coalition partners

In total, the three companies together blocked 4.1 million LPG connections belonging to customers having more than one LPG connection. Similarly, around 1 million LPG connections with consumers having piped gas connections (YERY) were blocked. “The country has around 2 million YERY connections and it is growing. Another 1 million LPG connections with households having YERY will be blocked,” he said.

The OMCs currently lose Rs 231 on each LPG cylinder as they sell at government controlled rates. A 14.2-kg LPG cylinder meant for domestic use sells at Rs 399.26 in Delhi compared to Rs 1,148 for a commercial cylinder of 19 kg, with prices for the latter being market-linked. The huge difference provides an incentive for black marketing and diversion towards commercial use. It also leads to indiscriminate use of the subsidised fuel. The total subsidy on domestic LPG was Rs 30,000 crore last financial year. During the current financial year’s first quarter alone, the LPG subsidy stood at Rs 11,495 crore as no price hike has been allowed since June 2011.

A proposal last year to limit the number of subsidised cylinders consumers could get in a year was dropped after opposition from key UPA allies, the DMK and Trinamool Congress. The petroleum ministry had made proposals to cap subsidy to the committee on direct transfer of subsidies headed by Nandan Nilekani, chairman, Unique Identification Authority. The ministry wanted to bring an income-based cap on cooking gas so that the subsidy benefit was targeted at economically weaker sections.