LPG customer base dips after a decade

NEW DELHI: India lost about 6.2 million liquefied petroleum gas (LPG) households between April and August, shrinking the customer base for the first time in more than a decade as supply constraints caused by the Iran war prompted oil companies to halt fresh connections and streamline existing ones.

The number of active domestic LPG customers fell to 327.7 million at the beginning of September from 333.9 million at the start of April, according to oil ministry data. The customer base under the government's Ujjwala scheme for poor households also fell by about 0.6 million to 105.7 million.

India's LPG customer base had been expanding steadily, with the adoption of cooking gas accelerating over the past decade. The active LPG customer base more than doubled to 333.9 million at the beginning of the current fiscal year from 148.6 million at the start of 2015-16. Growth ranged between 11.9% and 19.6% in the four years to 2018-19, before slowing to around 5% or less as the overall customer base expanded. This fiscal year, the customer base has shrunk by 1%.

The decline comes as the Iran war has constrained LPG supplies from the Gulf region, which before the war supplied about 90% of India's imports. Amid tighter supplies, oil marketing companies stopped giving fresh LPG connections to households while resorting to Aadhaar-based biometric verification to weed out inactive customers, multiple connections within a family and customers with access to piped natural gas (PNG), industry executives said.

The government has also been pushing LPG customers in areas with access to PNG infrastructure to switch to natural gas. City gas companies added nearly 0.6 million PNG customers until July this fiscal year, taking the total to 17.5 million. A better metric, however, is billed customers, where the increase has been 1.06 million to 10.7 million.

The shift to PNG accounts for about a sixth of the 6.2 million LPG customers who have dropped out.

Southern India lost the highest number of LPG households since the end of March, at 2.63 million, followed by western India with 1.62 million and northern India with 1.5 million.

Eastern India lost 0.34 million customers. At the beginning of September, northern India had the largest LPG customer base at 99.3 million, followed by southern India at 79.8 million, western India at 68.3 million and eastern India at 67.5 million.