Demand for cooking gas took a dip on Wednesday with the last date for linking bank accounts of customers with their fuel distributors using Aadhaar cards to avail of subsidy ending on December 31.
Distributors have, however, described the phenomenon as temporary. Wednesday’s announcement of a hike of more than Rs. 230 per 14.2-kg gas cylinders for domestic use also caused some confusion among the customers, affecting offtake, said a dealer here.
The dip in demand was confirmed by sources in the Udyamperoor bottling plant of the Indian Oil Corporation. Bottling operations were cut by about 30 per cent on Wednesday because there were not enough orders from distributors to run the plant at its full capacity of 130 to 150 loads per day.
The Indian Oil Corporation holds the largest chunk of the Kerala market for cooking gas at about 53 per cent. The oil company has three bottling plants — Udyamperoor, Kollam and Kozhikode.
The price of domestic cylinders went up to Rs. 1,293.50 apiece with the increase of Rs. 230.50 on Wednesday. However, sources said the increase would be absorbed by the government subsidy for customers who have linked their bank accounts with their distributors using Aadhaarcards.
The price of a 19-kg commercial cylinder has gone up to Rs. 2,184 with the increase of Rs. 385.94 on Wednesday. The prices will vary from district to district depending on the transportation charges.
Meanwhile, a cooking gas dealer said hike in gas price had landed some of the distributors in trouble because they had to raise more money to buy new loads.
Money for gas loads from the oil companies are paid in advance. The latest price hike implies that a dealer has now to pay more than Rs. 3.5 lakh per load in place of the previous amount of about Rs. 1.25 lakh. The situation was a little difficult for some of the dealers, especially those who do not have sufficient volumes, he said.
Combined with problems like shortage of labour, the need to raise more money to buy supplies was making gas distribution less attractive to many dealers, he claimed.