A Crisis In The Making

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Delhi’s has announced a new policy on distribution of LPG cylinders which was implemented by the J&K government without protest. With approaching winters in an energy deficit state already reeling under shortage of electricity, is this a new crisis in the making, BILAL HANDOO reports.

After consuming six cylinders at a rate of Rs. 412, a consumer has to pay Rs. 961 for each non-subsidized cylinder - Photo:Bilal Bahadur

After consuming six cylinders at a rate of Rs. 412, a consumer has to pay Rs. 961 for each non-subsidized cylinder – Photo:Bilal Bahadur

As the cries across the valley over new guidelines on distribution of Liquefied Petroleum Gas (LPG) are getting shriller, the reforms are set to enhance the revenue of Oil Marketing Companies (OMCs) by Rs 20,300 crore. According to the official figures, the sale is expected to add Rs 1,67,000 crore to the accounts of OMCs for 2012-13 as compared to Rs 1,38,541 crore in 2011-12

Presently, there are three major players that supply the stock of LPG to valley; Hindustan Petroleum Corporation Limited (HPCL), Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL). Collectively, they provide 8,57,124 LPG connections in Kashmir. HPCL leads with 6,23,148 connections; IOCL has 1,71,243 and BPCL has 62,733.

Going by the government’s proposal of supplying six LPG cylinders to each registered connection, the total consumption of LPG cylinders in Kashmir will be 51,42,744 annually. Official records suggest most of the supplied LPG cylinders are consumed by the 7.5 million population of Kashmir. “Besides, migrants, tourists and paramilitary personnel mostly consume non-subsidized LPG,” official data reveal.

According to the figures of the J&K’s finance ministry, there are about 15 lakh registered connections in the valley that includes both subsidized as well as non-subsidized connections. New guidelines demand re-registration and upgradation of earlier documents for which the government has set Oct 15 as the deadline. After consuming six cylinders at a rate of Rs 412, a consumer has to pay Rs 961 for each non-subsidized cylinder. Oil companies hiked the rate of non-subsidized LPG cylinders by Rs 127. New rate has been set at Rs 961 as against Rs 856 announced by the centre earlier.

But sources in J&K’s Consumer Affairs and Public Distribution (CAPD) department say the proposal to provide nine cylinders per connection annually is in the pipeline. “Keeping the climatic conditions of the valley in mind, nine cylinders per connection is being sought,” a source said.

With the opposition turning the heat on the government over the new LPG distribution policy, the CAPD minister, Qamar Ali Aakhoon, recently assured the public that he would look into the matter. “I will direct the oil companies to resume home delivery to consumers,” he said.

The move to reduce the number of subsidized gas cylinders and stop the supply until re-registration has caused increased the woes of population reeling under severe fuel shortage. The new guidelines require a consumer to submit proof of identity, Rs 1250 security deposit for cylinder without gas and Rs 180 for a safety pipe. Other optional services can be availed by paying Rs 150 for a regulator, Rs. 200 for stove inspection and Rs. 35 for consumer card.

“It is an insane decision on public. How is this government expecting us to get all formalities done within such a brief spell of time,” said an agitated customer, Majid Dar, while standing in a long queue in Srinagar’s Karan Nagar area to get his LPG connection re-registered.

 “It is clear that the state government has no immunity to resist such anti-people decisions. At least it could have given a breathing time to people till all formalities were completed,” said a CAPD official, wishing anonymity.

Surprisingly, some people feel the new policy will check the black marketing of cooking gas. “Most people utilize subsidized LPG for commercial purposes and as a fuel for vehicles,” a gas retailer in Srinagar’s Khanyar area, Mushtaq Bhat says.

The opposition parties on Tuesday demanded an immediate roll back of the hike in fuel prices and increasing the cap on subsidized LPG cylinders. Amidst the commotion created by the opposition, J&K’s finance minister Abdul Rahim Rather said the state government is helpless since it has no say in deciding the LPG prices,” We will again request the government of India if it can help J&K state vis-a-vis LPG.”

Mir Mushtaq, director CAPD said the oil companies have unblocked around 40,000 connections in the valley and they were working hard to complete documentation of the entire consumer base in Kashmir.

PDP president, Mehbooba Mufti has warned the government that the new policy will have dire consequences. “There is a possibility of upheaval during the winter if LPG is not made available to the common people. People are already reeling under electricity shortage. They will be left with no alternative fuel.”  The crisis is clearly far from over!

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A journalist with seven years of working experience in Kashmir.

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