State Oil Companies To Add 5,000 Distributors For LPG By 2019

State Oil Companies To Add 5,000 Distributors For LPG By 2019

State oil companies are aiming to augment their cooking gas distribution network by nearly a third in a little more than a year to cater to the rapidly expanding consumer base, mainly in rural areas.

The past three years have witnessed a spectacular rise in access to cooking gas, putting strain on the current distribution network that hasn’t grown as fast. Between April 1, 2015, and September 30 this year, the number of active domestic cooking gas consumers has risen 44% to 21.4 crore, while the number of LPG distributors has expanded just a fifth to 19,200.

The government is now pushing oil companies to accelerate the process of appointing new distributors and ensure they quickly become operational, an oil ministry official said.

“By March 2019, we should have more than 5,000 new LPG distributors functioning on the ground,” the official said.

The government has already issued 2,000 new licences. In addition, nearly 600 applicants have been selected through draw of lots in recent months while another 3,400 are slated to be picked for licences by March.

After obtaining licence from an oil company, it usually takes about a year for an applicant to set up a cooking gas distribution agency, which involves obtaining many local regulatory clearances as well as readying an office and warehouse.

New distributors are mainly coming up in regions that have been short on distributors or places which have seen a surge in new cooking gas consumers.

States like Uttar Pradesh, Bihar, Bengal, Odisha and Maharashtra are set to have a big share of new distributors.

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“This time we undertook geospatial mapping to figure out efficient locations for distributors,” the oil ministry official said. The aim was to go to the needy places, instead of adding one more distributor to an already covered area.”

The new LPG consumers are mostly located in remote and rural areas and from underprivileged background. Big distance to gas agencies become a deterrent for consumers to seek a refill when they run out of gas. In these regions, services by distributors are relatively weak and home delivery of cylinders mostly absent, making it difficult and expensive for consumers to use cooking gas.

By staying close to consumers, state oil companies can hope to overcome these consumption hurdles and increase their sales volume.

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