Prices Soar to Rs 1,500-Rs 2,800 per cylinder in black market

The ongoing Iran conflict has severely impacted LPG supplies in India, with consumers forced to shell out exorbitant money ranging from Rs 1,500 to Rs 2,800 per cylinder in the black market.  Besides, a majority of consumers are facing difficulties in accessing LPG cylinders for the past one week.

Moreover, LPG dealers have outlined supply/disruption delay, according to a survey. This comes even as the centre has repeatedly assured that there is no shortage of LPG or fuel and there is no need to panic. The survey report reveals that 53 per cent of household consumers were told by dealers about supply disruptions or delays in the past week. In fact, 57 per cent reported experiencing cylinder delays and black marketing over the same period.

The survey conducted by LocalCircles found that the impact is that 36 per cent of consumers surveyed who are experiencing LPG black marketing in their area say suppliers/middlemen are charging Rs 100-Rs 500 extra per cylinder, but 9 per cent of them are also paying over Rs 500. Cases have emerged in Delhi-NCR where some gas agencies are charging as much as Rs 1,500-Rs 2,800 per cylinder,” according to the survey.

An LPG cylinder in India costs between Rs 900 and Rs 1,000, whereas a commercial gas cylinder costs between Rs 1,800 and Rs 2,200, according to data from OMCs. As a result, many Indian households are scrambling to find alternative cooking options, relying on appliances such as induction cooktops. Meanwhile, restaurants have warned that disruptions in gas supply could force them to reduce menu options, raise prices, or even temporarily shut operations.

Fears of shortages have triggered panic booking and long queues at LPG distribution agencies across several cities, the report says. Many households have attempted to secure replacement or additional cylinders even as private distributors increased prices.  The Government has directed Oil Marketing Companies (OMCs) to prioritise LPG supply for domestic consumers and asked state authorities to closely monitor the situation to prevent hoarding and profiteering.  The survey received over 57,000 responses from household consumers located in 309 districts of India. 61 per cent of respondents were men, while 39 per cent of respondents were women. 40 per cent of respondents were from tier 1, 27 per cent from tier 2 and 33% respondents were from tier 3, 4 & 5 districts.

In view of many consumers lining up in front of LPG suppliers to get replacement cylinders or striving to book extra cylinders, the survey asked household consumers, “Have LPG dealers in your area mentioned supply disruption/delay issues in the last 1 week?” Out of 19,307 who responded to the question 43 per cent indicated that “no such issue (has been) mentioned” by their dealers; 32 per cent of respondents indicated that the “dealer said supply may be delayed”; 21 per cent of respondents indicated that their “dealer said supply shortage currently exists” and 4 per cent of respondents did not give a clear answer. To sum up, 53 per cent of household consumers surveyed say LPG dealers have mentioned supply disruption/delay to them in the last one week.

Given the pictures of big crowds outside LPG dealers’ outlets in the media, the survey asked consumers, “In the last 7 days, have you faced any difficulty booking or receiving a domestic LPG cylinder?”

The question received 18,798 responses with 43% indicating that they had “no difficulty – booking and delivery normal”; 7% of respondents indicated that they “had to wait longer than usual for delivery”; 29% of respondents indicated that “dealers said cylinder not available/ booking delayed”; 7% of respondents indicated that they “had to follow up multiple times to get delivery”; and 14% of respondents indicated that they “had to buy LPG cylinder from black market at higher price”.

To sum up, 57% of household consumers surveyed reported experiencing LPG cylinder delays and black marketing in the last one week. To understand the magnitude of black marketing, the survey asked consumers, “If you or someone in your neighbourhood had to buy LPG outside the official system, how much extra was charged per cylinder?”

Out of 19,769 consumers who responded to the question 39% indicated “no black market purchase in our household/ neighborhood” is undertaken; 8% of respondents indicated that they had to shell out “up to INR 100 extra per cylinder”; 11% of respondents indicated that they had paid “INR 100-300 extra per cylinder”; 8% of respondents indicated that they had paid “INR 300- 500 extra per cylinder”; 9% of respondents indicated that they had paid “more than INR 500 extra per cylinder”; and 25% of respondents did not give a clear answer.

To sum up, 36% household consumers surveyed who are experiencing LPG black marketing in their area say suppliers/middlemen are charging an extra amount of INR 100-500 per cylinder.