Subsidy on LPG for the Common Man in India.

Subsidy on LPG for the Common Man in India.

We are now in the middle of a debate where everyone is reacting to the recent announcement by the Central Government to limit the number of the LPG Cylinders available to the ordinary LPG Consumer up to a maximum limit of Six for the coming financial year. The numbers have been decided after looking into the cost-consumption of an average consumer spread all over the country. This is a valid debate and we all must participate in this as this will have an effect on all of us.

The question of providing LPG Cylinders to the average consumers is closely related to the following areas of concern while we deiced as to what should be the pattern of consumptions. The points related to the consumption are  

1.      Consumers residing in the urban or sub-urban areas have been the main beneficiaries of these subsidized LPG Cylinders. The monthly or bimonthly quota of the rural and remotely residing consumers has been on an average 4 to 5 LPG Cylinders per year. Domestic fuel is supplemented by other carbon-fuels like coal, charcoal, fuel-wood , cow-dung cakes and petro kerosene oil. Very few cases of bio-gases, solar cookers, electric-heaters and diesel generated stoves are also seen.

2.      The Distributors, Dealers, Stockists and Vendors of the LPG cylinders survive on the black-marketing of the LPG Cylinders that are booked in the names of all the consumers registered with them at their respective stocking point and they are sold to anyone who wants them at a premium rates, without any kinds of paper-documents and at whatever frequency the buyer may demand.

3.      The domestic categories of LPG cylinders reaches the commercial consumers like eateries, bakeries, industries, Hotels, etc. which prohibits the usage.

4.      The domestic LPG cylinders are purchased by the consumers themselves but they themselves sell these LPG- cylinders in the black markets. Several efforts to contain these loopholes at the consumer level has been discarded finally by the Oil Companies.

5.      The periodic sample checks at the live-end usage of LPG Cylinder by the Oil Companies have been very tardy, biased against the rural consumers and full of monitoring loopholes.

6.      The rates of the LPG differ by the point of delivery, Bottling Point and transport expenses for which no Bills / receipts are provided to the consumers;

7.      Agencies have made many dummy consumers based upon the actual paper documents procured through the middle-man who broker black marketing,

8.      The procedure of the Right to Information Act is seldom followed by the Oil Companies, their dealers , Staff Members and Agencies registered for Booking –cum-delivery system .

If there is such a vast quantity of pilferage what are the possible solutions ?

I suggest the following steps –

1.      The consumer should book all the LPG Cylinder and purchase all the quota assigned to her for a given period of time. The Consumer must update her information online and the booking , intimation of arrival of Stock, Rate at the point of delivery and the time for wait at the Stock yard should be done online. We must remember that the Stock , etc. is mainly in the urban centers and the services online can easily be accessed through SMS, Mobile-Net and Phone Calls. The consumers should be asked to purchase the LPG Cylinder within let us say a week’s time after which that offer must automatically be passed on to the others in the wait-listed consumers. This procedure may be similar to the Railway Ticket Booking System .

2.      The good number of LPG Gas Filling Stations should be allowed to be opened in every City which may have more than three- lakhs of population. The location should be closer and very near  to the Big Cities, National Highways and Major Tourist Destinations. These locations may be targeted in the first phase of expansions of the Gas Filling Stations. Black marketing should be discouraged by making the Motor-Gas readily available in the bigger cities.

3.      The price-rate difference between the commercial and domestic LPG Cylinder should be reduced further and may become same, so that the commercial consumers do not hunt for domestic variety. The gap of the prices can be compensated by indirect taxes or levies on the establishment itself.

LPG Aplenty , where is the Subsidy ?

4.  The monitoring of the LPG Cylinder Suppliers should be done by making all the information online. The local administration can easily monitor the demand –supply gap if the information about the LPG Sale is available to them. The manual reporting System should be stopped at all the levels. The SMS Based Information sharing with the Consumer should be started for all the Oil Companies. The franchisee and Dealership System will not cater to the need of the LPG Cylinder.

5.      Compliance to the Right to Information should be made mandatory for all the participants in this System. The vendors, Dealers and the Stockist do not share the information with the Consumers despite repeated efforts by the Civil- Societies, Consumer Courts and Aware Consumers. The Government of India will have to make the rules very strict in this regard.

6.      The  delivery of the LPG Cylinder at the doorstep of the Consumer and Safe local transportation of LPG Cylinders must be made compulsory for all the Oil Companies.