Indian LPG Business Delights from the Synergy between Regulation and Technology – Taking Energy Inclusiveness to New Normal

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Indian LPG Business Delights from the Synergy between Regulation and Technology – Taking Energy Inclusiveness to New Normal

Journal Title: International Journal of Management, IT and Engineering - Year 2017, Vol 7, Issue 9

Abstract

The story of LPG in India reflects the footprint of country’s stride on the path of sustainable development. LPG marketing in India exhibited secular trend of growing consumption, high standard of service delivery and unstinted commitment towards nation building. Large population, increase in affordable income and changing lifestyle of Indians, together, have made this product much in demand. Availability of LPG has been maintained across the country by the three PSU oil marketing companies (OMC), namely Indian Oil, Bharat Petroleum and Hindustan Petroleum. LPG supply chain entails capital investment, safety precautions and technology adoption; all the factors have been well planned and executed by the OMCs, with long term developmental approach. Selling price of LPG has been kept under regulation, primarily to make the product affordable to all sections of the people. Indian LPG story has been an exemplary case of making clean cooking fuel available, accessible and affordable to all sections of the people, thereby preventing indoor air pollution, arresting deforestation and mitigating greenhouse gas emission. (1, 2) Studies conducted during and prior to first decade of this century highlighted then prevailing inadequate energy security and crippling energy poverty experienced by households in rural India. (3, 4, 5, 6, 7) However, the last 7 years have witnessed massive transformation in rural penetration of LPG, enhancing accessibility and availability of LPG. The issue of affordability was long addressed by a regulated pricing regime, making the product subsidized. The universal and open-ended subsidized pricing led to some distortion, incentivizing diversion and creating unsustainable fiscal burden on state exchequer. Last three years, during the regime of BJP led NDA Government at the centre, addressed these issues by initiatives like direct transfer of subsidy into customer’s bank account (DBTL-PAHAL), voluntary surrender of subsidy (Give-it-up) and by providing free installation of LPG to targeted households at the bottom of the socio-economic pyramid (Pradhan Mantri Ujjwala Yojana - PMUY). These drives taken during last 3 years have caused a silent revolution in the realm of making India energy inclusive. Indian households, otherwise residing in deep recess of deprivation, started feeling for the first time that the agony of energy poverty, entrenched since time immemorial, is finally on the recede.

Authors and Affiliations

Dr. Debesh Patra

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