Green Push: Rural consumers set to get LPG cylinders at doorstep

NEW DELHI: Rural households may get cooking gas cylinders delivered at their doorsteps soon as part of Prime Minister Narendra Modi’s push to take cleaner fuels to more homes. The government is looking for ways to make it viable for rural dealers to home deliver cylinders, the lack of which makes consumption of cleaner fuel slow, expensive and quite inconvenient in the hinterland.

Since assuming charge as prime minister last year, Modi has pushed his government to connect more consumers and cities with piped gas, increase penetration of liquefied petroleum gas (LPG) in rural areas and urge well-off citizens to give up subsidy on cooking gas so that funds can be used for the needy subscribers, mainly in rural areas. The government hopes to use the LPG infrastructure freed up by citizens opting for piped gas to reach out to more rural consumers.

India has about 7 crore rural LPG consumers and 12 crore in cities. About 4,900 distributors cater to rural consumers while 11,800 dealers serve cities. The potential to grow LPG consumption in rural areas is naturally huge but a combination of ineffective policies, lower affordability, poor access and consumer inconvenience has restricted demand.




"For the convenience of the LPG, the rural consumer has to undergo many inconveniences," said Satwant Singh, a former executive director (LPG) at Indian Oil Corporation, the country’s top distributor of cooking gas.

For a rural consumer, a refill comes at a huge cost: long hours spent in visiting the dealer’s warehouse several kilometers away—repeated visits due to stock-outs on many occasions— and the wages lost in that, and the hassle of arranging transport to and from warehouse, which can at times be as costly as the refill price.

"Delivering LPG (liquefied petroleum gas) cylinders at the consumers’ doorstep is a huge challenge. We are searching for the best ideas to deal with it," said an oil ministry official. The government officials and oil companies’ executives are discussing ways that can make it viable for rural dealers to undertake home delivery.

Lower consumer concentration in villages and lesser demand— rural consumers typically consume less cooking gas due to easy access to cheaper substitutes— work against the viability of a rural dealership, which usually caters to a cluster of 5-6 villages.

"If this can be doubled to 8-10 villages, the demand would be enough to turn it viable," according to Singh.

A dealer needs about 2,500 cylinders a month for viability and the government should define delivery charges for rural areas as it does for urban areas, he added.

In 2009, the government launched Rajiv Gandhi Gramin LPG Vitrak scheme to increase LPG penetration in rural areas. The scheme did help boost rural consumer base but also brought in several complaints of poor implementation by oil companies, following which the government suspended the scheme a few months back.

The government has now launched a comprehensive survey to understand the LPG consumption map of India and identify regions poorly covered by LPG distributors. The findings of survey and a follow-up direction will be shared with state oil companies for better identification of locations for dealerships and deeper penetration of LPG in rural and hilly areas.

The government, meanwhile, is also working on preparing a master plan to scale up LPG consumption in the country in three years.