This translates into 10 per cent of new agencies to be set up in the country

Public sector oil marketing companies are set to unveil a major expansion of their cooking gas distribution network in Tamil Nadu to offer better customer services.

Under this programme, they plan to open 275 new, regular liquefied petroleum gas agencies. This translates into 10 per cent of new cooking gas agencies to be set up in the country over the next 18 months.

Indeed, this will be a big gain for the State as never had so many new LPG agencies been proposed in one go.

“Recently, the government approved release of fresh advertisement for setting up of a maximum of 2,794 regular distributorships across the country,” an Indian Oil Corporation official says.

The approval also saw the oil companies cancelling the process of appointing new distributors last year. But, beyond the numbers will be challenge of achieving the underlying objective behind the expansion. This was already tested when under pressure from existing distributors of the three PSU brand cooking gas — Indane, Bharat Gas and HP Gas — the Union Ministry of Petroleum and Natural Gas scaled down the number of new agencies.

The original plan was to open around 7,000 more agencies — the number of distributors across the country as on April 1 as per official, provisional figures was 12,610. (Apart from regular distributors, a separate category of agencies for rural areas are set up under the Rajiv Gandhi Gramin LPG Vitaran Yojana).

Bodies representing cooking gas distributors approached the Ministry seeking a review as opening of new agencies involved restructuring of the customer base.

This essentially meant that customers of many existing agencies, particularly those in semi-urban and rural areas where one or two distributors functioned, would be transferred to the new agencies in the same market.

There is a ceiling limit in terms of the number of refills that distributors can supply a month. This limit differs for urban, semi-urban and rural markets.

Leaders of LPG distributor agencies say the ceiling in Chennai, which is based on the 2001 Census, is 15,000 refills a month. Since there has been a significant increase in the customer base till the next Census (2011) and with demand for new LPG connections in cities low, the distributors sought enhancement of the ceiling. The Ministry responded positively, but the enhancement was nowhere near their demand, an Association office-bearer said.

The advertisements for the first set of new agencies would be released shortly. In the process of restructuring now being undertaken, existing distributors having refill sale less than 75 per cent would be benefitted as they will gain customers through restructuring, an oil industry official says. Explaining the policy, the official says that new distributorships are planned in the existing markets as and when average refill sale of all the distributors in the market exceeds the ceiling limit. This is to ensure existing distributorships render desired levels of service.

Following the new approval, IOC, BPCL and HPCL cancelled the process of appointing distributors that was initiated on December 31, 2012, but put on hold on January 29.

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