The LPG supplies in the four southern states crippled as the strike of bulk transporters entered into the seventh day on Wednesday.

The southern region Bulk LPG Transport Owners Association has been on strike since February 29 impacting the LPG supplies from various supply locations such as refineries and ports to the upcountry LPG bottling plants of the oil marketing companies (OMCs), namely IOC, BPC and HPCL. The association has been demanding an increase in frieght charges to

R3.50 from R2.23 per tonne /km against the proposed R2.50 by OMCs.

The transporters were also on strike from January 12 to 19.

The association have also demanded induction of additional LPG trucks on contract by the OMCs. According to an IOC statement, the OMCs inducted trucks on contract basis for bulk LPG transportation and a tender was floated by the OMCs on expiry of the earlier contract on October 31, 2011. On opening the tender, it was observed that the transport contractors had quoted a rate that was higher than the earlier contracted rate by almost 78%. Also, the OMCs received offers of more trucks than they had tendered for. The industry as a whole received offers for over 10% of the number of trucks tendered for, while the numbers were as high as 28% in the case of IOC.

According to sources in the LPG transport owners association. there was still room for negotiations on the vexed issue and by Thursday a common meeting ground among the stakeholders can be prepared to resuming peace talks. However, sources in the industry said that the stalemate continued despite several rounds of talks.

After the first strike in January this year, the TN government had intervened that the strike was temporarily called off. The OMCs had also given assurance that the additional trucks offered by the transporters could be considered for induction, provided a reasonable rate could be arrived at in the first place. Another round of negotiations was held between OMCs and the transporters during January 27-28, 2012, but it was inconclusive, with the transporters sticking to their demand for higher rates.

The IndianOil statement said that simultaneous negotiations with the transport contractors of eastern region were concluded successfully at rates significantly lower than those demanded by the transporters in Southern region. ??These rates were also offered to associatio of southern region. Considering the truck operating conditions, logistics, long-haul trips, etc., that applied to the transport contractors of Southern Region, this was a fair offer. Even this was rejected by the transporters??, said the statement.

The indefinite strike has put the entire LPG industry and lakhs of LPG cooking gas consumers across the four southern states to great hardship and inconvenience. A prolonged meeting facilitated by the Tamil Nadu governement between the OMCs and the transporters March 3, also failed to resolve the deadlock.

??The OMCs have a well-established system for finalisation of transport contracts that matches the best practices in any industry. These contracts also have an in-built clause that suitably compensates the transporters for any escalation in diesel price, which forms a major component of the operations cost. The fact that the OMCs had received offers of more than the required number of trucks sought by them in the tender is indicative of the remunerative nature of the business. Despite this, the bulk LPG transport contractors have not accepted the OMC offer till date??, the statement pointed out.