The All India LPG Distributors Federation recently announced that they will not deliver cylinders to homes from October 1, 2012. Consumers will have to personally collect their cylinders from the distributors’ offices. The LPG Distribution Federation’s president, Pratap Doshi cleared the air on the latest twist in the contentious LPG issue, which has been simmering ever since the six cylinders a year, announcement.
Why did you take the decision to stop home delivery of LPG cylinders?
The government has come out with a new policy of dual prices – subsidised and non-subsidised cylinders. Government will subsidise six cylinders per annum and the balance cylinders a customer needs will be supplied at higher, non-subsidised rates. There is no foolproof system in which we can record the delivery of the cylinder in the customer’s premises. There are a number of points, with reference to the blue book, i.e. the official book a consumer has as a record for cylinder deliveries, that can also be confusing like all customers do not have the blue book at the time of delivery so what do we do then? All these issues need to be clarified.
The total responsibility to make this scheme successful has been foisted on the distributor but when the distributor’s delivery staff is operating outside his office premises, how will he accept that responsibility? Till now there was no problem since if you complain, we can deliver another cylinder at the same price. Now since there is a difference in pricing, when you say that you have not received the subsidised cylinder, we send you a non-subsidised cylinder, then who is going to bear the difference in cost? Distributor can’t do so.
Therefore, till the time the government evolves a foolproof system, we will not be able to resume home delivery. When a customer comes to the distributor’s centre with a photo identity, we know that he is the genuine customer and will give him the cylinder.
What are your other issues with the government?
Our second issue is that our commission has not been revised for the last three years, even though the government conducted a study on it. The government must work out a rate of commission that is commensurate with today’s working conditions as well as takes into account the new scheme and the price hike of R5 per litre for diesel since we are transporting these cylinders. The decision should be declared by September 30.
Thirdly, the government has come out with a Know Your Customer (KYC) system. There is no clarity as to what should be done if a customer refuses to fill a KYC form or who will bear the cost.
What is the rate for subsidised and non-subsidised cylinders?
A subsidised cylinder costs R423. They have not announced the rate for non-subsidised cylinders. The fact that they are yet to finalise the rate shows that the government implemented the scheme without any proper preparation.
What can the customers do in the current scenario?
We don’t want to inconvenience the customers but till we can deliver the cylinders to them, they have to come and pick up the cylinders.
So only the person in whose name the account is, can pick up the cylinder?
Yes. That’s the primary requirement, isn't it?
And they have to bring photo identity proof to collect the cylinder.
We know that it is very difficult. You come with photo identity and I don’t have a cylinder in stock, you are going to be very unhappy. We are going to be gheraoed. We don’t want that, but we are left with no choice.
How can you ensure even with your suggested system of identity proof that someone will not forge an identity and take away a cylinder not allotted to them?
They can forge identities, anything is possible. But normally no customer will forge an identity for just one cylinder. That’s what we presume.
But how can a customer transport the cylinder? It is illegal to carry cylinders in taxis and autorickshaws and everyone doesn’t own a car.
Kailash Dudani (senior vice president, All India LPG Distributors Federation): Yes, it is illegal to do so because it is extremely hazardous to keep the cylinder in the horizontal position in a taxi. The fuel is in liquid form and one drop can magnify 350 times. If there’s a leak, it can be dangerous. That’s why cylinders have to always be transported in an upright position. First a system should have been in place and then implemented. Here, the system is implemented first and then searched for.
Isn’t there some way that you can ensure a foolproof system without waiting for the government to come up with a solution? Have you suggested any ideas to the government?
We have suggested smart cards, coupon system, setting an average price for all cylinders or even issuing payee’s account only cheques to the customer wherein he or she can pay the full amount for all the cylinders and they’ll be given a cheque for the subsidised cylinders and sign an acknowledgement of receipt. But everything entails cost. There is no clarity on who will bear the cost.
You think the government will find a solution soon?
They have to, if they want the cylinders delivered. Ultimately it is a political situation they have to face. I get hardly R30 per cylinder. If the government comes up with a policy that makes me run my business in loss, will I accept that? No. The government has assured us that they will look into our issues.
So this strike is not indefinite?
It is not a strike. We are trying to implement this policy so that cylinders don’t go to the wrong person. We are not doing anything negative.
You are trying to protect your own interests.
Yes, while trying to implement the policy in the best possible way we can think of. If anyone has suggestions, then they are welcome. We know that closing down home delivery is not the answer but what can we do? The customers should be sympathetic towards us.
So the piped gas customers won’t have any problems.
Yes, but they are also saying that consumption will be curbed for that too and prices will be revised. That will