Six lakh LPG consumers affected

01 Sept. 2020-IMPHAL, Aug 31: As many as 6 lakh consumers have been deprived of LPG cylinders as transporters’ strike enters 4th day, said IndianOil today. Appealing to the LPG transporters to call off their strike, the IndianOil, in a statement, asserted that the “unjustified” agitation by the transporters since August 27 has put its consumers in distress during the COVID-19 pandemic.

The North-East Packed Transport Association had launched flash strike from August 27 protesting the recently floated packed transportation tender for IndianOil bottling plants. No prior notice was received for the strike by IndianOil, it claimed.
According to IOC, the transporters are demanding
1) Tender to be floated from Guwahati, instead of Kolkata.
2) There should be an increase of 50% over existing rates and rates for all plants in North-East should be the same, irrespective of any factor
3) Only 306 capacity cylinder trucks should be inducted. Higher capacity 342/360 trucks and 10 wheeler (504/525) trucks should not be considered. Transportation rates should be worked out accordingly
4) All LPG packed trucks that are currently under contract should be considered for induction
5) Own use trucks for LPG distributors should not be considered in the tender
6) Local transporters should be given priority over outsiders

Meanwhile, the IndianOil has already taken up the matter with the transporters’ association for calling off their agitation and the State Government and the district authorities have been apprised of the progress of the discussions. A meeting was held on August 28 at the IndianOil AOD State office premises in Noonmati, Guwahati to address the demands of the transporters.

In the meeting, the transporters were informed on how the entire tendering process is handled online to reduce human intervention. The Regional Contract Cell, Kolkata functions as a nodal office for the entire eastern region and publishes tenders of high value exceeding Rs 50 lakh as per policy. This is done to maintain transparency and increase the ease of doing business. Even though the tenders were finalized at Kolkata, all administrative actions for the tenders as well as all post tender formalities that required direct communication between IOC and the transporter (eg work order, BG, submission of documents, agreement signing etc) would be carried out at the IndianOil AOD State office at Noonmati. Moreover, all verification of truck documents shall be done at the respective LPG plants, said IndianOi

However, the transporters stuck to their demand of a minimum 50 percent hike in earnings/trip, said IndianOil claiming some of the transporters accepted during the meeting that their average earnings/trip would go up by 10-13% in the new tender over the current contract. They also accepted that as on date, their monthly trips have gone up by 25% due to higher bottling levels over 2014-15, when the existing tender was finalized, especially after the rollout of the PM’s Ujawala Yojna.

IndianOil further stated that the introduction of higher capacity trucks has been done across the country after the Government of India notified the change in axle capacity of trucks in 2019. Based on this, IndianOil has taken a decision to increase the truck capacity requirement to 342/357/360 from the current capacity of 306 cylinders. This will ensure additional transportation of 12-14% LPG cylinders, which will directly increase the availability of LPG to customers.

There is “absolutely no loss” to the transporters because in the new tender, they will get paid as per the increased carrying capacity, said IndianOil adding many higher capacity vehicles are already engaged in various LPG plants across North East.

Regarding the demand for equal treatment of a distributor and a transporter, IndianOil maintained that the association of both the channel partners with IndianOil is very different and “cannot” be compared. The LPG transporters can ferry LPG cylinders from bottling plant to any distributors serviced by the bottling plant whereas the LPG distributor transport only few cylinders required at their distributorship. There has been no change in the tender condition for both the LPG distributors and the transporters in the new tender when compared to the existing one. The distributors had got priority even in earlier tenders in North East and erstwhile AOD, since 1990s and there was no objection made by the transporters before, claimed IndianOil.

As far as the earnings from transportation of LPG cylinders from IndianOil, the LPG transporters earn very “handsomely” compared to a LPG distributor. On an average, billings of most major transporters are around Rs 2.4 to Rs 3 Cr, which is around 9 times (900%) higher against the average billings of a distributor which is around Rs 25-30 lakh. The earnings of transporters are huge compared to their other counterparts in the transportation industry. Moreover, unlike other businesses, LPG transportation is/was not affected by COVID pandemic. Transportation rates also have a bearing on the final price of LPG cylinders which must be “borne by the customers”.

There are also a lot of new parties who want to offer LPG trucks and are interested in participating in the tender. However, the tender which is on hold since 2018, is preventing any new party from entering this lucrative business. This is highly detrimental to the society and public at large since it blocks entry of newer transporters which directly affects employment generation of local people, said IndianOil. Prior to the strike, the backlog of LPG cylinder delivery in the region had been reduced from nearly 10 days prior to the pandemic to only 1.6 days recently. It has now increased to over 2 days as the strike progresses. Every day, nearly 1.5 lakh customers are affected by the strike and as the strike enters the 4th day today, nearly 6 lakh customers have been deprived of LPG cylinders, said IndianOil, appealing the transporters to withdraw their strike and resort to discussions to resolve the issues.

IndianOil also reiterated that it is committed to providing uninterrupted LPG supplies “despite all challenges”.