A number of pro-customer steps were initiated to set things right on the LPG distribution front, and most of them paid off well, says Dr Neeraj Mittal, Joint Secretary (Marketing), Ministry of Petroleum and Natural Gas, Government of India, in conversation with Nayana Singh, Elets News Network (ENN)
You have taken several proactive measures in enabling various online facilities for the management and distribution of LPG cylinders. Please brief us on these initiatives.
We have taken several steps for management and distribution of LPG cylinder. To start with, we started a de-duplication exercise to eliminate ghost/duplicate LPG connections. As per the rule, every domestic LPG consumer is entitled for one subsidized connection only, but it was observed that in reality there are multiple connections registered either in the same name or in a different name in the same household. To detect such multiple connections, MoPNG prescribed a Know Your Customer (KYC) Process for new connections and has asked oil marketing companies to undertake a de-duplication exercise. This exercise has resulted in massive savings of subsidy. The multiple connection detection initiative has led to subsidy savings of the order of Rs 5,764 crore per annum by detecting one crore such ineligible connections.
Secondly, in line with the recommendation of Task Force on Direct Subsidy, the government launched the Direct Benefit Transfer for LPG consumers in their Aadhaar enabled bank accounts. The first phase of Scheme was launched in 18 districts on in June 2013. Later, the DBTL scheme was expanded to 291 districts in six phases. So far Rs 5,391 crore has been transferred directly into the bank accounts of 2.8 crore LPG consumers.
Then, we did rating of LPG distributors based on their delivery performance giving them 5 stars to 1 star (***** to *). The aim was to measure, increase and improve the delivery performance of each distributor. Rating of distributor helps a consumer in deciding the change of distributor. It also motivates distributors to improve delivery times, so as to retain consumers. There has been a quantum jump in the number of 5 and 4 star distributors after the launch of the system.
We also did consumer relationship management through mobile platform. Over 50 percent LPG customers have registered their mobile numbers with OMCs. An Android based application has been launched for LPG functions such as refill booking, new connection booking, booking for second cylinder,complaints, history of supplies, hotplate repair, surrendering connections and rating of distributors.
These consumer-empowering e-initiatives in LPG marketing were recognised and the Ministry of Petroleum & Natural Gas won the CSI Nihilent e-Governance (2012-13) Award of excellence for its entry titled “Empowering Consumers: Transparent Supply Chain and Efficient Subsidy Administration” during 48th Annual Convention of the Computer Society of India (CSI-2013) at Vishakhapatnam.
“The government has initiated a 5kg LPG scheme to empower the LPG consumers… The scheme was launched to cater to a new category of consumers, who are mobile and do not want a permanent LPG connection, but may still require LPG for their needs”
How have these initiatives helped in ushering efficiency and transparency in the system?
The initiative of de-duplication has led to a substantial reduction in subsidy burden. Similarly, on introduction of uniform pricing under the DBTL scheme, the incentive of diversion of subsidized cylinders to commercial sector reduced drastically. According to analysis of the sales data from the DBTL districts, it was found to have reduced by 10-18 percent post implementation of capping and DBTL. This amounts to a subsidy reduction of Rs 4,644 crore (10 percent of the total subsidy on LPG in 2013-14) had the scheme been rolled out in the entire country. The Star rating distribution based on time taken for refill delivery has improved substantially towards higher Star ratings since its launch, as can be seen from the fact that between December 2012 and October 2013, the proportion of 5 and 4 star distributors has increased from 43 percent to 68 percent, signifying a jump in LPG cylinder delivery service quality. On the same lines, consumer relationship management through mobile platform resulted in easy access to information and access to services. The application proved an effective means of communication channel to educate customers on the safety, new initiatives and various schemes.
Cleaner, safer LPG
“Household air pollution is one of the most important risk factors for chronic respiratory diseases, cardio and circulatory diseases, diarrhea and other infections. As LPG is a clean fuel, it will improve the overall health of the household. Therefore, there is a need to expand the coverage of LPG in the country, especially in underserved rural areas”
How has technology helped in solving the issues such as duplication and on-time delivery of LPG cylinders in rural areas?
The sheer scale and size of the database and legacy nature of the records was a daunting challenge. The huge volume of data prevented visual inspection or door-to-door inspections, while legacy data prevented easy software detection on account of poor data quality. Technology helped in identifying a suspect list of the multiple connections in categories, namely Same-Name-Same-Address (SNSA) Near and Far, and Different-Name-Different-Address (DNSA) Near and Far. These are then verified, and if necessary, blocked.
What are your views on Cloud technology and other new related technologies in strengthening e-Governance?
An effective e-Governance system should be efficient, reliable, economical and easily maintainable. Technologies such as Cloud and Big Data can play vital role in increasing collaboration between Ministry, OMCs and other government organizations to achieve greater transparency and accountability of stakeholders, empower citizens to access relevant information from single window and allow government to effectively track and monitor progress of government schemes. This system will take necessary raw data from all stakeholders’ databases and present it to them as information that is meaningful. In terms of OMCs, this could lead to advantages such as de-duplication verification across OMC for new consumers,central registration of LPG consumers, centralized grievance redressal system etc.
What are the new steps you are undertaking to empower the LPG consumers?
The ministry has initiated a 5kg LPG COCO Scheme to empower the LPG consumers. The LPG sold under the scheme is called Free Trade LPG (FTL). At the time of first sale, cost of equipment (DPR plus cylinder), cost of product at prevailing non-domestic 5kg cylinders price and administrative charges will be payable. At the time of subsequent refill only the cost of product is payable. Any proof of ID is acceptable and no proof of address is required.
This was launched to cater to a new category of consumers, who are mobile and do not want a permanent LPG connection, but may still require LPG for their needs. Initially, the scheme was launched at Company Owned Retail Outlets in Mumbai, Chennai, Kolkata and Bangalore. The scheme has now been extended to 33 cities and to outlets other than CO-CO ROs, and retail shops as well. More than 5000 LPG cylinders have been sold in these cities and more than 8,000 queries have been made at different ROs. BPCL has also introduced dial a cylinder scheme as an extension to this scheme in some cities. Under this scheme, a person can dial a specified number to book the cylinder which will be supplied to consumer with two hours time by a special van.
What is your vision regarding this sector?
Household air pollution is one of the most important risk factors for chronic respiratory diseases, cardio and circulatory diseases and diarrhea and other infections. Household air pollution also contributes to outdoor air pollutions. It is estimated that nearly one million premature deaths in India happens on account of household air pollution. As LPG is a clean fuel, it will improve the overall health of the household. It is also more environment-friendly, as the emission of Green House Gases from the LPG is substantially less than the emission from fuels presently being used. Therefore, there is a need to expand the coverage of LPG in the country, especially in underserved rural areas. But there are significant issues in expanding the coverage of LPG among the rural households such as affordability, higher under-recoveries, augmentation of LPG handling infrastructure and increasing the distribution network. We would like to work on a strategy to expand LPG to rural areas while addressing the challenges in the times ahead.