Tempers were frayed this month as LPG supplies, and domestic gas cylinders ran short across India.
The Government was forced to issue denials that LPG supplies could run out and instead explained that holiday periods had left the country under stocked and behind refilling schedules. In a reply to a question in parliament Minister of State for Petroleum Dinsha Patel explained the disruption in supplies was due to the movement of vehicles during Ardh Kumbh Mela, less input at Haldia port due to reduced draft, reduced production at GAIL's fractionator at Vijayapur and disruption in pumping of LPG through pipelines.
He also enthused that plans were in hand to deal with the problem saying the, $quot;Government has advised oil manufacturing companies to liquidate the backlog in these states by operating the bottling plants on holidays and during extended hours.$quot; However, the holiday delays are just one side of the story.
According to office-bearers of residents' associations in some Indian cities, around 8,500 domestic LPG cylinders were being diverted for commercial use every day. This incurs a loss of over Rs 14 lakh a day by way of the tax lost on unsold commercial cylinders, as well as the subsidy amount for domestic cylinders.
Criminals are targeting the cylinders as a domestic LPG cylinder costs Rs 290 excluding the tax, while a commercial cylinder, weighing 19 kg, costs Rs 645. Therefore diverting domestic gases to industry offers a tidy profit. Similar scams have also been discovered in Malaysia where gas for residential use is also subsidised.
Speaking about the crooks latest capers the Minister for Potroleum has reiterated that this matter will not be tolerated saying, $quot;In addition to the action taken by the OMCs under the Marketing Discipline Guidelines (MDG), state governments are empowered to take action against illegal use of domestic LPG.$quot;