Oil marketing company fails to weed out ghost LPG connections in Indore

An RTI query has revealed how an Indore-based LPG gas distributor was selling subsidised cooking gas cylinders in the black market by maintaining more than 80 ‘ghost’ connections.

An RTI query has revealed how an Indore-based LPG gas distributor was selling subsidised cooking gas cylinders in the black market by maintaining more than 80 ‘ghost’ connections.

Gross irregularities have surfaced in the distribution of subsidised LPG cylinders during a physical inspection conducted in the city by Indian Oil Corporation Limited (IOCL), said Chanchal Gupta, an RTI activist.

Gupta, who runs a LPG helpline for consumers, said the state-run oil marketing company after physically verifying found that 89 out of the 108 ‘suspicious’ subsidised domestic connections only existed on paper.

Gupta said he had submitted a list of 108 suspected ‘ghost’ connections to the IOCL for verification. All the 108 connections belong to Sundaram Gas Company, an IOCL distributor, he said.

Gupta said despite his repeated complaints, the IOCL had failed to weed out the alleged ghost connection. The oil marketing company only acted after the Union petroleum and natural gas ministry intervened.

The IOCL in its reply admitted that apart from carrying out unaccounted sale of cylinders, the distributor had overcharged the customers for mandatory services, including checking gas leakages and rebate on cylinder that were not delivered to the customers at their homes.

The IOCL in its reply (HT has a copy) said the gas distributing agency had delivered 3,714 subsidised cylinders to 89 ‘ghost’ connection. This means that 3,714 cylinders were delivered only on paper, Gupta said.

"Most LPG distributors manipulate customer records and sell the cylinders in the black market."

"The scam is not limited to IOCL distributors. Similar practices are on in other oil marketing companies," he added.

In September 2014, IOCL had issued a notice to Sundaram Gas Company in connection with 89 suspicious connections, but the distributor carried on business as usual, Gupta said.

IOCL chief area manager (Bhopal area) OP Sahu said a penalty of Rs 36 lakh has been imposed on the distributor, which it is yet to pay.

"The distributor has been given a month’s time to approach the appellate authority against our action," he said.

Blaming deliverymen for the ghost connections, Vijay Jhawar, the owner of Sundaram Gas Company said, "We've clarified our stand to IOCL. Our deliverymen did not verify identification documents at the time of delivery."

Asked why the IOCL has failed to weed out ghost connections even after such irregularities have come to light, senior sales manager of IOCL Tahseen Rayaz said inspections are conducted randomly as “verifying each and every connection is not possible”.

"Distributors are fined whenever irregularities are found," he said.