22.6.13

A drop in LPG usage

A tight vigil against diversion of subsidized fuel meant for domestic use seems to be paying off. The consumption of liquefied petroleum gas (LPG), commonly called cooking gas, has started to dip since government capped sale of subsidized cylinders to every household.
For the first time ever, sales have also fallen for two successive months in comparison to the corresponding period of previous year. Consumption fell 0.7% in April 2013 over April 2012 while in May the fall was more pronounced at 5.2%.
The government capped the number of LPG cylinders for a household to six a year effective September 2012, but later enhanced the limit to nine per year in January 2013 under pressure from political allies.
During April-May 2013, cooking gas consumption in India fell to 2.4 million tonnes from 2.5 million tonnes in April-May 2012, a fall of 3.3%, according to provisional data from the three state-owned oil marketing companies. This includes both piped as well as bottled LPG. Oil planners had anticipated a 4-6% growth in LPG consumption for the 2013-14 fiscal. But, early figures suggest growth may be slower. LPG consumption grew around 10% in 2011-12 before it dropped sharply to 1.8% in 2012-13.
Interestingly, while sales of the 14.2-kg cylinder meant for domestic use has dipped, officials said consumption of the 19-kg cylinder meant for commercial purposes has grown around 10% since September 2012 (when the order to cap subsidized cylinder was announced).
While it is evident that diversion of subsidized LPG for commercial and automotive purposes has halted, some analysts also attribute it to a slump in industrial activity. 

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