The sale of commercial cylinders, weighing 19 kg each, has seen an increase in recent months. Various factors, including an usual rise in use before Deepavali by restaurants and sweet shops and offer of discounts to end users, has led to the hike, say oil industry sources.
A source in a popular hotel chain said that they usually had a heavier requirement during the festival as they made more sweets and savouries for sale. “Since there is no problem in getting additional cylinders, we consume LPG according to the requirements of our branches,” he said.
The market leader, Indian Oil Corporation, has seen an increase of 20% in areas in and around the city. “The company provides a discount of up to ₹200 per commercial cylinder, which we pass on to the consumer. There are distributors who sell around 500 cylinders a month and even 20,000 a month. The commission varies according to the volumes sold,” explained a distributor. This month, a commercial cylinder is priced at ₹1,244.50.
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A few leading hoteliers, who were earlier with private gas companies, have now shifted loyalties to the State-run oil companies due to discounts being provided, said distributors. The discount is apart from the commission given to the distributors. Other oil companies, including Bharat Petroleum Corporation and Hindustan Petroleum Corporation, too offer discounts on commercial cylinders.
Less than domestic LPG
A non-IOC dealer said that the company was ruthlessly marketing its cylinders. “They even come into territories usually covered by other companies in the domestic cylinder market, which is affecting the sales of other distributors. Also the price of a commercial cylinder after discounts works out to be much cheaper than a domestic cylinder,” he said.
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All that an establishment has to do to avail itself of commercial cylinders is submit KYC details and pay the deposit amount of ₹1,700 per cylinder. However, not many industrial customers take LPG in 19-kg cylinders. They take in bulk through tankers.