The Hindu : National : Freeze on new LPG connections urged

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Saturday, May 17, 2008
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National

Freeze on new LPG connections urged

Sujay Mehdudia

Fix a quota of LPG cylinder per family
A complete freeze
on expansion of
retail outlets

NEW DELHI: Faced with mounting losses that threaten to touch Rs.1,80,000 crore this fiscal and indicating a increasing “tight situation,” the Oil Marketing Companies (OMCs) have proposed a series of measures.

They included, a “total freeze” on issuing of new LPG connections, fixing a quota of LPG cylinder per family, curtailing import of diesel and putting a complete freeze on expansion of retail outlets network throughout the country.

Amid indications of a “quota regime” and skyrocketing of crude oil prices in the international market, consumers could well be asked to curtail their consumption of petroproducts particularly LPG. According to the proposal, the OMCs have asked for “immediate freeze” on issuing of new LPG connections throughout the country; fixing of one LPG cylinder per family quota; curtailing imports of diesel purchased at high international prices and all plans for expansion of retail outlets be put on the hold till the situation stabilises.

Highly placed sources said unable to bear the burden of rising crude oil prices and the refusal of the government to take corrective measures in shape of issuing of ``enhanced oil bonds” and increasing the retail sale price of motor vehicle fuel and the LPG, the OMCs have petitioned the Petroleum Ministry to take these “steps immediately” in order to curtail the losses at the present levels. The OMCs are losing over Rs. 550 crore a day on sale of petrol, diesel, kerosene and LPG at subsidised rates. “`The oil companies are borrowing Rs. 3,500 crore per month to keep going. The borrowings (for the three firms) have reached Rs. 65,000 crore,” a senior official remarked.

Freezing issuing of new LPG connections would help limit the Rs. 305.90 per cylinder loss.

Besides, fixing a quota per family will also reduce consumption patterns. Officials said though the nation recorded a shortage in LPG and diesel production this year, the companies have suggested managing demand within the existing production. The matter was likely to be discussed only after the return of Petroleum and Natural Gas Minister, Murli Deora who is out of the country for a week, they said.

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