As the LPG supply squeeze extends into the third week, the central government on Wednesday promised to increase supplies of commercial LPG to states that fast-track the rollout of piped gas networks in a bid to ease pressure on the cooking fuel availability.
As the war in West Asia blocked India’s access to almost 60 per cent of its LPG, the government prioritised supplies to domestic household kitchens. Supplies to commercial establishments, such as hotels, were initially cut off, but later gave a fifth of their requirement.
Now, the central government has offered to raise commercial LPG supplies to 30 per cent in states that expedite the rollout of piped natural gas – an easier alternative to LPG for household kitchens and commercial establishments.
Briefing reporters, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said that while LPG supplies are constrained, piped natural gas (PNG) supplies to households and industries continue unabated.
“LPG users should shift to PNG wherever there is a city gas distribution (CGD) network nearby,” she said, adding that her ministry has written to states, offering 10 per cent more commercial LPG if they grant deemed permissions to all old applications, and the same after 24 hours of new application for laying pipelines, cut annual rental/lease charges and allow dig and restore schemes.
“Onus is on states and UTs to take this reform forward and expedite approvals,” she said.
On the LPG supply situation, she said there was no dry out anywhere in the country.
“Situation, however, continues to be worrisome” primarily because the imports have been blocked, she said.
Online bookings have increased to 93 per cent, but consumers continue to queue up at dealerships.
“LPG consumers are requested to wait after doing online booking. Cylinders will be delivered to their homes,” she said. “There is no need for panic booking or going to LPG distributors.”
To ease pressure on LPG, the government is promoting commercial and household LPG users to switch to piped natural gas. City gas companies are offering incentives and faster connections.
On Wednesday, Oil Secretary Neeraj Mittal wrote to all state governments and UTs stating that city gas operators have complained about high charges for right of use (ROU) for laying and digging as well as lease rent being levied, which has “dampened the CGD investment climate”.
“It is known that excessive taxes on a fledgling business could have a strangulating effect on other consequential economic activities of that business,” he wrote.
To improve the investment environment and expedite the adoption of natural gas as a lean fuel and the substitution of scarce LPG supply, the state government should minimise the levy of charges, he said, citing that just 1.6 crore domestic piped cooking gas connections are being issued by CGD entities despite a commitment of 12.63 crore.
“If this gap can be bridged through ease and cost of doing business reforms, one can easily generate economic activity and earn higher corresponding revenue from a larger pie,” he wrote.
Listing out reforms needed for states to get higher commercial LPG quota, Mittal said 1 per cent additional allocation of LPG will be done to states that form panels for approval of CGD applications and resolving grievances.
An additional 2 per cent allocation will be given to those who grant deemed CGD permissions to all old applications and to new applications after a lapse of 24 hours of applying for laying pipeline.
States would get an additional 3 per cent of LPG if they introduce a ‘Dig and Restore Scheme’ for CGD entities so they can dig and restore roads, etc., on their own, thereby eliminating restoration charges. States that reduce annual rental/lease charges for laying/operating the CGD network to zero will get 4 per cent additional commercial LPG, he said.
States can give evidence of implementation of the reforms to get the additional LPG, he added.
With shipments from major suppliers, such as Saudi Arabia and the United Arab Emirates, affected, India has moved to ration supplies. The government has curtailed allocation to commercial users and industries to prioritise household consumption and prevent an immediate shortage of cooking gas.
The disruption has begun to ripple through several sectors that rely heavily on LPG. Restaurants have started dropping slow-simmered dishes from their menus because they consume large amounts of cooking gas, while industries, such as brick and tile manufacturing, ceramics and glass kilns, are also facing difficulties in sustaining operations due to gas shortage.
Essential services, including crematories, laundries and hospital kitchens, are similarly struggling to maintain regular activity, even as bakeries, street-food vendors and community kitchens report curtailing output amid tighter LPG availability.
Sharma said commercial LPG stocks have been placed with states, who have been asked to decide on the priority for their usage. So far, 15 states and UTs have issued LPG distribution guidelines.
Also, states have been given 48,000 kilolitres of additional kerosene for meeting cooking and other needs, she said, adding that 12 states have utilised this additional quota.
India, she said, continues to be self-sufficient in petrol and diesel, with no fuel dry-outs reported at retail outlets.
Asked about jet fuel (ATF), she said there are enough supplies.
