Incentives on cards to increase LPG cover in remote, inaccessible areas

The petroleum and natural gas ministry is planning to introduce incentives and ease the application process to enable more liquefied petroleum gas (LPG) distributorships in remote and inaccessible areas.

These areas include the middle Himalayas, parts of North-East and the forests of Chhattisgarh and Odisha. The government classifies any place where either Gramin or Rurban LPG distributorship can’t be set up as Difficult and Special Areas or Durgam Kshetriya.
 

This includes hilly regions, forests, tribal inhabited areas, sparsely-populated places, disturbed areas, islands and Left Wing extremism (LWE)-affected areas.
 

The number of distributorships in difficult areas stood at 2,012 as on May 1, 2023. As compared to this, the number of rural distributorships was 11,744. Officials said the number of difficult area distributorships need to go up to connect those areas to the LPG cylinder distribution network.
 

This is part of the government’s efforts to raise the number of active domestic LPG connections in the country.
 

Providing a larger segment of the population with dependable and safe LPG connections is a focus area for the Prime Minister’s Office. It is a key pillar of the government’s public policy objectives in the energy consumption space.
 

The number of active domestic LPG connections has risen to 314.3 million as on May 1, 2023. This is up from 145.2 million in April 2014, just before the Narendra Modi-led government came to power.
 

Criteria under review
 

LPG distributorships are awarded by Indane, Bharat Gas and HP Gas, the subsidiaries of Indian Oil, Bharat Petroleum and Hindustan Petroleum, respectively.
 

Network expansion has been an important business activity for the three oil marketing companies (OMCs) for increasing the reach of petroleum products.
 

As a result, OMCs are engaged in appointing new LPG distributors as a continuous business process, to provide LPG to households.
 

Applicants looking to set up distributorships in rural and difficult areas earlier needed to pay a non-refundable application fee of up to Rs 8,000 (general category), Rs 4,000 (OBC) and Rs 2,500 (SC/ST).
 

This was raised to Rs 25,000 for distributorships in all areas when the detailed guidelines on Reconstitution of LPG Distributorships came into effect in May 2022.
 

“There have been complaints that the fee is too high. It may be revised downwards,” another official said. The process is also complicated and may be shortened.
 

“We are trying to ease the process further, and the eligibility criterion is being reviewed,” he said.
 

One of these is that the applicant also has to own a plot of land, which is of at least the minimum dimensions for construction of an LPG godown, according to the guidelines in the application for distributorship.
 

Taking into consideration the different terrain, population distribution and availability of infrastructure across varied topographies of Difficult and Special areas, the government may bring in differentiated dimension requirements.
 

In 2016, the government had relaxed the rules to allow applicants, who were already the owners of a ready LPG cylinder storage godown.
 

Similar changes in criteria may be brought in, the official said.

In focus

• 25,200  LPG distributors in India, as of May 2022
• 105.4%  LPG coverage in India, as of Nov 2022
• 314.3 mn  Active domestic LPG connections, as of May 1, 2023
• 2012   Distributorships in difficult areas (hilly regions, forests, tribal-inhabited areas, sparsely populated, disturbed areas, islands and Left Wing Extremism (LWE)-affected areas)