Profile of oil industry and fuel saving tips
- Part 1 -

Indian Oil Corporation *

LPG cylinders meant for commercial use :: Pix - TSE

Listed below are a few of the main points brought out by the Ministry of Petroleum in its annual Profile Report.

(1) Diesel Price Deregulation a major Reform' Brings Relief to Consumers: The Government deregulated diesel on 18th October, 2014. This move coupled with decreasing global crude oil and petroleum product prices has benefitted consumers because oil marketing companies have reduced diesel prices by Rs.8.46 per litre during August- December 2014 (at Delhi). Besides direct gain, the lower diesel prices have benefitted consumers indirectly as cost of transportation of goods by road has come down. Consumers now need to spend less on essential commodities like vegetable, fruits and other edible items. Deregulation of diesel is expected to result in better service delivery on account of increased competition.

(2) Inclusive Agenda for OBCs: As part of the government's agenda to benefit the backward sections of the society, the ministry of Petroleum and Natural Gas has, for the first time, reserved 27& of new Retail Outlets for citizens failing under other Backward Castes category, in addition to 22.5% reservation for Scheduled Tribes. This enables Public Sector OMCs to further Government's objectives of growth with equity.

(3) Expansion of Retail Fueling Network: As part of their plan to increase the accessibility and availability of oil products, the retail network of Public Sector OMCs is being expended by increasing the number of retail outlets and LPG distributorships in the Country, including rural area. This will improve availability of fuel in the farthest area of the country. Under this plan OMCs have advertised for setting up of new retail outlets at 35668 locations and new regular and RGGLV LPG distributorships at over 7000 locations. There are also plan to expand the network of compressed natural gas station and increase availability of piped natural gas as an alternative to LPG.

(4) Solarization: Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd-are progressively using solar energy for lighting their retail outlets. So far, 2412 of their retail outlets have been powered by solar energy. The target is to increase the number to 7200 retail outlets, by 31 th March 2017. The expenditure incurred on solarization of one retail outlet ranges from Rs. 10lakh to Rs. 25 lakh and these companies are developing a model to provide soft loans to dealers to fund this investment.

(5) Natural Gas Pipeline: The Ministry of Petroleum and Natural Gas is working on plan to connect one crore household through PNG network I 5 years. Petroleum and Natural Gas Regulatory board has invited bids for authorizing entities to develop the city gas distribution networks in 14 new Geographical Area in its 4th bidding round. Further, bids for 41 new districts will be invited in early 2015. At present,23 city gas distribution entities are operating in 47 Geographical Area in 12 States and Union Territories of the county.

(6) Rajiv Gandhi Gramin LPG Vitrak: In line with' Vision-2015 adopted for LPG Sector, the scheme, namely Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY) was launched on 16.10.2009. The objective of the scheme was to increase LPG coverage in rural areas of the country. So far, Oil Marketing Companies have advertised 7824 locations for setting up RGGLVs in various States of the country. Out pf these locations 3870 locations have already been commissioned as on date 01.11.2014.Selection for rest of the locations is in progress as per policy.

(7) Direct Benefit Transfer for LPG consumer (DBTL): Government of India has lunched Direct Benefit Transfer for LPG consumer (DBTL) Scheme namely 'PAHAL', in 54 district of the country on 15.11.2014 and in remaining district of the country on 1st Janauary, 2015. LPG consumers who join the PAHAL scheme, will get the LPG cylinders at market price but receive LPG subsidy (as per their entitlement) direct into their bank accounts. The present scheme allows transfer of subsidy with or without Aadhaar and thus ensures that no one is denied subsidy for want of Aadhaar number. The scheme aims to curb diversion of subsidized LG into commercial sector and is expected to substantially reduce the subsidy burden and can then be deployed in development scheme

(8) 5 Kg Cylinder: Government has allowed the sale of 5 KG LPG cylinder with/ without Domestic Pressure Regulars (DPR) through Public Sector Oil marketing Companies Retail Outlets, which are accessible to all and are open for long hours. Subsequently sale of 5 KGFTL cylinder has been extend to LPG distributorship points and Kirana /General Stores etc. also to further convenience of the target consumers.

The LPG sold under the scheme is called Free Trade LPG (FTL). At the time of first sale cost of equipment (DPR) plus cylinder), cost of product at prevailing Nondomestic 5 KG cylinder price and administrative charges will be payable. At the time of subsequent refill, only the cost of product will be payable.

(9) LPG Portability: In order to provide greater choice to customer to select his distributor and to bring competition among distributors portability was launched in 24 cities on 05.10.1013 and subsequently extended to 484 district covering 32 states / UT (Also included newly created state of Telangana). Under this scheme, the customer will be allowed to get transferred and get connection within the cluster of distributors, identified with common area of Operation, intra intercompany (across IOC-HPCL –BPCL).

(10) De-Duplication: As per the Liquefied Petroleum Gas (Supply and Distribution) order 2000, every domestic LPG consumer (Household) is entitled for one subsidized connection. However, it was observed that in really there are several multiple connections registered with OMCs either in same name or indifferent name but in same address of household. The presence of multiple connections has led to leakage of subsidy. To detect such multiple connections MoPNG Prescribed a Know your Customer (KYC) Process for new connections and has asked OMCs to undertake a de –duplication exercise. This exercise has resulted in massive savings of subsidy. The OMCs de-duplicated the LPG consumers within the OMCs and a suspect list of 2.56 crore multiple LPG connections was generated.

The Next logical step was to initiate inter-company de-duplications, and so far this process has been completed in 544 districts. These suspect connection, were published for verification and subsequent blocking. Over 1 crore connections have been blocked leading to a recurring savings in subsidy of Rs. 3445 crore per annum (@ Rs/522 subsidy average of 13-14 per cylinder and average consumption of 6.6 cylinder per connection).

(11) Initiatives in North East: There are 9 on-projects being undertaken by oil sector PSUs at an estimated cost of Rs.2763 crore for upgradation of existing infrastructure including crude oil pumping stations. tank farms, gas gathering stations and oil & gas p[ipelines.



To be continued