LPG burning bright

Aug 31 2013, 02:15 IST
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SummaryThe government hopes to curb leakages in the LPG subsidy with the help of the direct benefit transfer scheme.

The government hopes to curb leakages in the LPG subsidy with the help of the direct benefit transfer scheme which is to be extended in 35 districts from September 1 and then, in phases, throughout the country

India’s tryst with liquefied petroleum gas (LPG) began in 1955, when the then Burma Shell started marketing LPG in Mumbai. LPG has, over the last six decades, become the most popular kitchen fuel. The expansion story can be written in two parts with 1980 as the watershed year. Prior to 1978, the marketing of LPG was restricted to the extent of product availability from indigenous sources. Large-scale expansion of LPG marketing was undertaken from 1980 with the increase in product availability due to expansion of refineries and setting-up of extraction units. As the popularity of LPG increased, its demand rapidly outstripped the indigenous availability necessitating large-scale imports.

In the early years, LPG marketing was restricted to only urban areas. Subsequently, the penetration of LPG was slowly expanded to semi-urban and rural areas as well.

Today, LPG in India has reached over 15 crore (15.43 crore as on July 1, 2013) households, which roughly translates to more than 60% of the population. Few would have ever imagined that with its humble beginnings in 1955, and considerable reservations regarding its acceptability, LPG would go on to acquire this popularity one day.

A clean and green fuel

A comparison between the smoke-riddled, hot and blackened kitchens of the past and the ultra-modern, sleek kitchens of today using LPG would be sufficient proof of the clean, friendly and convenient nature of LPG compared to other fuels like coal, wood or cow-dung cakes.

In view of its obvious benefits, the government decided to provide subsidised LPG for cooking, so that more and more kitchens would be persuaded to adopt this fuel and turn safe and hygienic. Today, India is the fifth-largest consumer of LPG in the world after the US, China, Saudi Arabia and Japan. However, with almost 90% of its LPG consumption in the domestic sector, India is the third-largest consumer of domestic LPG after the US and China. A mind-boggling near-3 million LPG cylinders are door-delivered every day (i.e. 900 million a year) to cater to the 15 crore households in the country.

Reaching the hinterland

The rapidly growing popularity of LPG threw up the concomitant logistic issues—the need for developing a nationwide supply chain, maintaining an uninterrupted supply chain, shouldering the mounting subsidy

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