IOC ties up 50% additional LPG supplies to meet rising demand
NEW DELHI: India’s largest oil refiner and fuel retailer IndianOil has tied up 50% more supplies of bulk LPG for April and May to ensure uninterrupted availability for cooking gas refills for households. India is the second-largest consumer of LPG in the domestic sector and imports large quantities to make up for limited capacity of state-run refineries to produce the fuel, though the country is a net exporter of petroproducts. Nearly 90% of the imported LPG comes from OPEC countries, with Saudi Arabia and UAE topping the list. Oil minister Dharmendra Pradhan has been connecting with his Saudi and UAE counterparts — among other — in the last few days to seek additional supplies of the fuel. LPG supplied in 14.2-Kg cylinders is the main cooking fuel for households in India. LPG demand has increased nearly 2% in March, bucking the trend of demand for all other fuels – such as petrol, diesel and jet fuel – altogether showing an 18% drop, the lowest in a decade, as the lockdown to check coronavirus spread put serious curbs on economic activities across sectors. LPG consumption has been boosted by families being confined to their homes. The state-run company, with a 50% market share, is also increasing LPG production in its major refineries by optimising operations. Simultaneously, the company’s LPG bottling plants are working extended hours, operating night shifts and on public holidays/Sundays to meet the growing demand. The transport infrastructure linking the plants to the LPG distributors has also been optimised for quick turnaround of cylinders, the company said in a statement on ThursdayThe company expects LPG demand to rise further from this month as it begins to deliver free LPG to poor households that were provided LPG connection free of cost under the ‘Ujjwala’ scheme. The government has offered three free refills (in the April-June period) to beneficiaries of prime minister Narendra Modi’s marque social welfare plan. IndianOil has advised its distributors to give priority in delivering refills to these beneficiaries. The company has initiated the process to transfer the full market cost of each cylinder into the linked accounts of its 3.7 crore Ujjwala consumers as advance. A total of Rs 2,780 crore will be transferred in the next two days. The statement said IndianOil has delivered 3.38 crore LPG cylinders to its customers in the last 15 days since the lockdown, or 26 lakh cylinders per day. Together with the two other state-run players – BPCL and HPCL – LPG distributors are delivering roughly 56 lakh refills to households daily across the country. For its frontline associates involved on keeping the supply chain going, the company has extended a medical insurance policy of over Rs 1 lakh, including COVID-19-related ailments, and made a provision for ex-gratia of Rs 5 lakh to the next of kin in case of death due to COVID-19
