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No word yet on new LPG connections

BUMPY RIDE: The freeze on new LPG connections by two companies continues.

BUMPY RIDE: The freeze on new LPG connections by two companies continues.   | Photo Credit: — Photo: K. Pichumani

N. Ravi Kumar

CHENNAI: Three days after one of the steepest-ever price increases, of a little over Rs. 50 per LPG cylinder, there is no word yet from the two major national oil marketing companies (OMCs) about removing the freeze on issue of new connections.

Distributors of Indian Oil Corporation and Bharat Petroleum Corporation Ltd, two companies which together have an overwhelming share of the market, are merely waitlisting those approaching the agencies for new connections. Sources in Hindustan Petroleum Corporation Ltd said the connections were being released by its distributors subject to availability of the equipment (cylinders).

The three OMCs had last month stopped issue of new connections, citing financial constraints in the backdrop of the soaring global crude oil prices. They said the companies were not financially comfortable to procure new equipment. While an Indane distributor said a circular on the resumption was awaited, an IOC official said it would be done only after taking stock of the equipment availability. Rushing through with the decision may result in problems for the existing customers, he said, adding the procedure of floating tenders for new equipment would take some time.

On the continuation of the free LPG connection scheme of the State government, he said while some of the beneficiaries identified in 2007-08 were yet to be supplied the connections, the list for 2008-09 had not been provided by the government. Sources among distributors added that the oil companies were going slow on resumption of new connections as they did not discount the possibility of a partial rollback in the hike. As regards the supply of double bottle connection (second cylinder), which remains suspended for a few years now, the IOC official said it would be a while before it is resumed.

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