Rural LPG delivery to get IT legup

State oil companies will likely tie up with the IT ministry’s common services centres to tap into their deeper network to easily deliver cooking gas cylinders to rural customers and plug the widening distribution gap due to record addition of new consumers.

In two years, state oil companies have added nearly 4 crore active consumers, expanding the consumer base 19% to 24 crore. But the infrastructure to serve them hasn’t expanded as rapidly—cooking gas bottling capacity has risen just 15% while number of gas distributors has grown only 16.4%, primarily due to a delayed government policy on distributorship and a sluggish network expansion by oil companies.

This has resulted in increased pressure on existing distributors, as well as suboptimal services to customers especially the new ones in rural areas. Lack of doorstep delivery in many rural areas, and distant gas agencies are also partly responsible for poor refill rates among customers who have been enrolled under the government’s Ujjwala Yojna in the last two years.


The oil ministry is now trying to address this by getting state oil companies to tie up with the IT ministry’s common services centres, which have been set up in villages to deliver government eservices. There are about 2 lakh such centres currently.

“These service centres will act as delivery point for gas cylinders as well as collection counter for KYC documents of rural customers,” a person with knowledge of the matter said.

Anybody can stock up to 100 kg of cooking gas, or liquefied petroleum gas (LPG), without a licence, which mean a service centre can keep up to seven filled cylinders for further distribution. The nearest gas agency will supply cylinders to service centres and also compensate them for stocking these. “The aim is to take cylinders to the doorsteps of customers in rural areas,” the person said, adding that a few filled cylinders available on all days in their own village will to a great extent solve the problem of access for customers even as new distributors are being set up.

Gas agencies usually charge Rs 20 for home delivery of a gas cylinder and therefore it’s not clear how much can an agency really offer to a service centre to incentivise them to stock cylinders. In places where home delivery is not available, customers usually spend Rs 100 or more in transport, and sometime have to forego their day’s wage to fetch cylinders from distant warehouses.

State oil companies are also on course to add another 5,000 distributors, including 3,000 by March 2019.