6,000 new distributors to boost LPG's rural reach

First-time online selection process in December; likely investment of Rs 2,000 cr

In an effort to extend the reach of cooking gas in rural areas, state-run oil marketing companies Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) are set to appoint 6,000 distributors through an online selection process by December. This could see an investment of Rs 2,000 crore.

So far, the Ministry of Petroleum and Natural Gas has received about 150,000 applications for this, of which winners will be picked through an online draw.

“This is for the first time in history that we are appointing distributors through an online draw. Earlier, there were confusions when the physical selection process was implemented. This will be sorted out this time. This is likely to get at least Rs 2,000-crore worth of private investment in the liquefied petroleum gas (LPG) distribution network,” said a source close to the development.

This is part of the road map laid down by Petroleum Minister Dharmendra Pradhan to increase LPG penetration to 95% by 2020.

Since the Bharatiya Janata Party came to power at the Centre in 2014, LPG penetration in the country increased from 56% of the population in 2014 to 74% in 2017.  

In order to achieve this goal, a little more than 30 million LPG users have been added between May 1 last year and now, under the Pradhan Mantri Ujjwala Yojana (PMUY). The scheme aims to provide 50 million LPG connections in three years to Below Poverty Line families, with a government support of Rs 1,600 per connection.

Of the distributorship licences that will be allotted, 1,028 will be in Uttar Pradesh for which 25,000 applicants are in fray.

Other major states with the maximum number of distributorships to be allotted are Bihar (986), West Bengal (631), Odisha (400), Jharkhand (300), Gujarat (300), Maharashtra (455), Madhya Pradesh (355), and Tamil Nadu (298). Kolkata-based MSTC will conduct the online draw for the oil-marketing companies.

However, industry sources complain that the go-slow attitude of the National Informatics Centre officials monitoring the process was delaying the allotment in some states.

“About 3,000 distributors will be for IOC, while BPCL and HPCL will have 1,500 each. We are kicking off the process in Punjab on October 27 and Andaman and Nicobar on October 30,” a source said.

Currently, there are about 19,000 agencies in India, and the government wants to increase that to 27,000 by 2019. Of the new connections allotted under the PMUY, 8% beneficiaries belong to Scheduled Castes and Scheduled Tribes.

The Union Cabinet is also likely to take a call in a month on increasing the reach of the PMUY schemes by adding another 30 million connections. To reach the target of 50 million, Rs 8,000 crore was allocated. Another Rs 4,800 crore is likely to be allotted soon.