PM Narendra Modi’s Ujjawala Yojana impact: LPG bottling plants are now utilising 120% of capacity

By: | Updated: March 23, 2018 12:26 PM

Bottling plants of oil marketing companies (OMCs) are utilising around 120% of their capacities with some even resorting to night shifts owing to the massive demand for liquefied petroleum gas (LPG) cylinders created by the government's flagship Pradhan Mantri Ujjwala Yojana (PMUY) and subsequent requirement for refills.

LPG bottling plants, PMUY, LPG cylinders, Ministry of Petroleum and Natural Gas, LPG connectionsLPG consumption for 2017-18 up to March has reached 21.3 MMT and is expected to reach 23.5 MMT for full year, according to another government official. (Reuters)

Bottling plants of oil marketing companies (OMCs) are utilising around 120% of their capacities with some even resorting to night shifts owing to the massive demand for liquefied petroleum gas (LPG) cylinders created by the government’s flagship Pradhan Mantri Ujjwala Yojana (PMUY) and subsequent requirement for refills. According to a government official, some bottling plants have started night shifts after obtaining requisite permissions from the Petroleum and Explosives Safety Organisation (PESO) to cater to the requirement for LPG cylinders. Data from the Ministry of Petroleum and Natural Gas show that 3.32 crore new LPG connections in the domestic category were issued by OMCs in 2016-17 and 2.27 crore during the period of April 2017 to January 2018.

LPG consumption for 2017-18 up to March has reached 21.3 MMT and is expected to reach 23.5 MMT for full year, according to another government official. The PMUY was launched in May 2016 and the scheme aims to provide partially-free LPG connections along with kit to households in the below-poverty-line category. The aim is to promote cleaner cooking fuel which is in line with the government’s commitment to reduce carbon emission. While the initial target of the scheme was to cover five crore households in three years from the date of commencement, given the success, the government in the Budget for 2018-19 announced to extend it to eight crore households by 2020. As on date, more than 3.5 crore connections have been issued under the PMUY.

According to data from the Petroleum Planning and Analysis Cell, as on February 2018, there were 26 crore registered domestic LPG consumers, of which 22.1 crore were active. There are 189 bottling plants in the country with bottling capacity of 16,714 TMT per annum. Another 32 are being set up by the OMCs and these are under various stages of construction. Of 32 future plants, 21 are being set up by Indian Oil Corporation.

A 60-TMT automated bottling plant as per the specifications of the Oil Industry Safety Directorate requires at least 20 acre of land and an average investment of Rs 150 crore, according to the first official quoted above. On an average, 40-45 lakh LPG cylinders are being supplied across the country every day. The increased demand has also led to backlog in supply of LPG cylinders and the number of days of delay varies across the country. “It also depends on the proximity to a bottling plant,” said the first official. For instance, the backlog in Assam for IOC customers is six days, but that for BPCL customers is three days.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition