Distributors say new cap on LPG causing huge losses

Jan 22 2013, 13:13 IST
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SummaryThe increase in the number of subsidised LPG cylinders from six to nine has led to non availability of cylinders for the time being.

The increase in the number of subsidised LPG cylinders from six to nine has led to non availability of cylinders for the time being. Besides, distributors are on the brink of losing lakhs by the sudden change in the upper limit of the subsidised domestic LPG cylinders.

“Our system needs to be upgraded and work is still in progress. We have been forced to stop delivery of gas cylinders since Friday and there will not be any delivery till at least Sunday,” said Sanjay Agarwal, zonal secretary, All India HP Gas Dealers Association.

Sushanta Mukherjee, president, West Bengal LPG Distributors’ Forum, too, agreed that there were some problems that had halted the supply of cylinders but said the issue would be dealt with soon. “There have been inconveniences but consumers are getting used to these sudden changes,” he said and added that the distributors whose orders had been loaded on Thursday, had got delivery on Friday. Since the subsidy was effective from Thursday midnight, dealers lost about Rs 510 on each of the cylinders,” he said.

Oil companies are in talks with gas distributors, and said they would probably issue credit notes to them. “It is a fact that each distributor has lost between Rs 1.5 and 2 lakh. It is still not clear how, if at all, the oil companies plan to reimburse the money to distributors,” said Sukamal Kr Sen, a city-based dealer of Bharat Gas and secretary of the Bharat Gas Distributors’ Welfare Association (Eastern Region).

There are others who said that a huge loss had been incurred as far as the stocks of LPG was concerned. “Demand had never fallen and I had stocked a huge number of these cylinders to avoid customer inconvenience. Now, if the oil companies do not reimburse the money, we will be in deep trouble. As it is the order that was delivered on Friday had blocked a lot of my money and I am not sure if I will get that,” said a dealer in south Kolkata on condition of anonymity.

Oil companies, on the other hand, while assuring that the deficit on Thursday’s orders might be reimbursed, said that the loss on stock would have to be borne by the dealers. “We are in talks with the dealers and by the end of this month we might issue a credit note to them but we are definitely not responsible for the stocks that a dealer has piled up at his godown. That they will have to bear themselves,” said a Bharat Petroleum official.

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