Indian LPG Business Delights from the Synergy between Regulation and Technology – What  can Nigeria learn?

Indian LPG Business Delights from the Synergy between Regulation and Technology – What can Nigeria learn?

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. 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.

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