Tamil Nadu

Lack of pipelines makes LPG expensive

Soaring costs: In Chennai, the price of a domestic cylinder went up by ₹25, and that of a commercial cylinder by ₹75.   | Photo Credit: Swapan Mahapatra

The absence of pipelines to bring liquefied petroleum gas (LPG) to Tamil Nadu from refineries elsewhere is turning out to be expensive for consumers in the State, as cooking gas prices here are among the highest in the country.

Following the revision of LPG prices on September 1, a non-domestic commercial cylinder containing 19 kg of LPG in New Delhi costs ₹1,694. The rate is ₹1,649.50 in Mumbai, ₹1,770.50 in Kolkata and ₹1,831 in Chennai. The domestic LPG situation is similar, with New Delhi (₹884.50) and Mumbai (₹884.50) having lower prices than Chennai (₹900.50). In Chennai, the price of a domestic cylinder went up by ₹25, and that of a commercial cylinder by ₹75.

“Most of the LPG the country procures is from Saudi Aramco, and this is off-loaded first at Mumbai, and later at Mangaluru, Kochi and Thoothukudi before reaching Chennai. Transport costs are higher since the ship has to travel all the way to the Eastern Coast. Delhi gets its supply via a pipeline. Tamil Nadu does not have an LPG pipeline till date. Perhaps it is time for policy makers to lay an LPG line to the State,” explained an industry source, who, however, pointed out that people in the State were opposed to pipelines. A pipeline from Kochi to Salem via Karur is 70% complete, but the project is stuck due to opposition in Tamil Nadu.

M. Venkadasubbu, president, Tamil Nadu Hotels Association, said considering the fact that the industry had just begun recovering from the impact of COVID-19 lockdowns, the Centre could at least reduce the GST slab of 18% for hotels for a certain period. “The lack of intra-State LPG pipelines has also lead to differential prices in various parts of the State,” he added.

Association secretary R. Srinivasan said that with several leading brands closing their branches, the hotel industry needs an impetus, and a reduction in the import duty on LPG or the transportation charges of the fuel would be passed on to the consumers. “The vegetarian segment of restaurants have returned to only 60% of their original business, and LPG constitutes under 10% of the total expenses,” he explained.

A distributor with a government oil company said they were witnessing a drop of around 3%-4% in domestic gas consumption, especially in BPL segment. “We are afraid that commercial consumers would switch to private LPG brands if the oil industry does not take steps,” he said.

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Printable version | Oct 18, 2021 10:11:38 AM | https://www.thehindu.com/news/national/tamil-nadu/lack-of-pipelines-makes-lpg-expensive/article36298382.ece

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