The Hindu : Front Page : Petroleum Ministry in alert mode following LPG shortage

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Tuesday, Feb 05, 2008
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Petroleum Ministry in alert mode following LPG shortage

Sujay Mehdudia

NEW DELHI: The Petroleum and Natural Gas Ministry has gone into an “alert mode” following reports of “severe shortage” of liquefied petroleum gas (LPG).

The Ministry is flooded with representations from various States and organisations complaining about the shortage of LPG supplies.

Although Petroleum and Natural Gas Minister Murli Deora has asked the public sector oil companies to give priority to restoring LPG supplies, the situation in some places has assumed “alarming proportions.”

The matter has already acquired political overtones with the Bharatiya Janata Party agitating over the issue and United Progressive Alliance allies expressing concern over the situation.

The Oil Marketing Companies (OMCs) have blamed the current situation on diversion of domestic LPG for commercial and heating purposes, an argument that has been dismissed by experts.

Shortage widespread

The shortage continues in Uttarkhand, Himachal Pradesh, Jammu and Kashmir, Maharasthra, Rajasthan, Delhi, Kerala and Karnataka, and the north-eastern States. Some officials blamed the present situation on the “LPG quota regime” introduced during 2005 that saves hardly Rs.300 crore a year to the government but has brought with it bad publicity among the masses.

However, the officials admitted that all was not due to the diversion of LPG supplies but the OMCs had “squeezed” their supplies for the last few months leading to the present mess.

“The government provides subsidy of nearly Rs.311 for a cylinder. As this causes a dent in their profit margins and they are not allowed to hike prices, they have resorted to curtailment in supply to bring down their losses,” a senior official said.

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