The Oil Ministry had in January put on hold appointment of new LPG agencies/distributors pending approval of new marketing discipline guidelines (MDG). (Agencies)
"The Minister approved setting up of 2,794 new distributors and the new MDG," an official said. Moily also approved raising the existing ceiling of refills a LPG distributor can sell by 10 percent.
Currently, a distributor is entitled to 15,000 refill every month in cities with more than 40 lakh population. The limit is 12,000 cylinders of 14.2-kg each for cities with 22 lakh to 40 lakh population and 10,000 for towns with 10 to 20 lakh population. For towns or cities with less than 10 lakh population, the refill limit is 8,000 every month.
The official said these limits have now been raised by 10 percent. Following the approval of new MDG, oil companies will issue fresh advertisments for appointment of 2,794 LPG distributors across the country, the official said.
The three state-owned oil firms--Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp-- together have about 13,000 LPG sales agencies or distributors currently.
The 2,794 new distributors to be appointed would be besides the planned expansion under the Rajiv Gandhi Gramin LPG Vitrak Yojana, under which small agencies are being appointed to cater to rural demand.
Apart from fanning into new and underserved markets, the plan approved involves redistribution of the customer base of some of the existing distributors.
The latter was to ensure that they handled customers only up to their ceiling limit, which is prescribed in terms of the number of monthly refill sales.
The official said the oil companies had in December last year advertised for about 3,000 out of the planned 7,000 new distributors but all of it was put on hold following the Ministry directive.
LPG distributors have steadily risen over the past decade. The country had 6,447 LPG agencies which rose to 9,000 in 2005 and crossed 10,000 mark in 2011. The official said the new agencies would mostly be set up in under-served areas.
The Oil Ministry had in January put on hold appointment of new LPG agencies/distributors pending approval of new marketing discipline guidelines (MDG).