Bringing a very small quantum of relief to domestic liquefied petroleum gas (LPG) distributors, the Centre has revised their margins with effect from October 3. This increase of ₹8.24 per 14.2 kg cylinder will not be passed onto consumers.
According to a communication to this effect from the Ministry of Petroleum and Natural Gas (MOPNG), the new margin was ₹73.08, of which ₹39.65 would be establishment charges and ₹33.43 would be delivery charges. Similarly, in the case of 5 kg LPG cylinders, the new establishment charges would be ₹19.82 per cylinder and delivery charges ₹16.72 per bottle. The government has also approved a fresh de-novo study to recommend a revised methodology for determining distributor margins or commissions for domestic LPG.
Distributors said that the quantum of increase was too meager. A distributor said that for delivery within a 5 km radius of the city, it cost them ₹26.15 just to deliver a full bottle and return an empty one to their godown. “This amount is hardly enough considering salaries for delivery boys, which, even as per the Minimum Wages Act, are around ₹10,000 per person. The establishment charges include electricity and water charges, stationary expenses, communication expenses, salaries, and welfare expenses for showroom staff, mechanics, and godown keeper,” he explained.
The State has over 2500 LPG agencies, supplying around 3.80 lakh cylinders daily. There are around 2.50 crore domestic LPG consumers who are covered by the three State-run oil marketing companies in Tamil Nadu alone.
Retail outlet dealer
Meanwhile, retail outlet dealers are waiting for an increase in their margins. “Dealers spend 90% of their margins on operating costs and get a profit of 10%. But in many cases, even that is being pumped into the business to keep it afloat. Margins were last revised in 2017. Since that time, electricity bills have increased by 40%,” explained a dealer. “I used to pay an EB bill of ₹60000; now I pay ₹1 lakh as an electricity bill. Also, during the last six years, I have hiked salaries, and most attendants get paid ₹19,000, including ESI and PF,” he added.
The dealer associations have been repeatedly representing the Centre for a hike in margins, and the three OMCs have recommended the same, explained an industry insider.
