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Indian Oil, HPCL and BPCL to shuffle cooking gas consumers

The three state-run oil companies have recently agreed to inter-company transfer of customers to ensure even distribution among gas agencies

, ET Bureau|
Last Updated: Aug 21, 2019, 08.19 AM IST|Original: Aug 21, 2019, 08.19 AM IST
Indian Oil 2
NEW DELHI: Indian Oil, Bharat Petroleum and Hindustan Petroleum will soon shuffle millions of cooking gas consumers between their agencies to expand the customer base for newly-appointed distributors and help make their business viable.

The three state-run oil companies, which mainly distribute cooking gas in the country, have recently agreed to inter-company transfer of customers to ensure even distribution among gas agencies. Usually, when a company appoints new distributors in an area, it also gives them some customers of that locality that had until then been served by older distributors. But this shift is generally limited to a company’s own distributors.

Under the new arrangement, the three oil companies will also pass on consumers to each other’s distributors.

“This will help efficiently distribute customers across agencies, increasing the viability of new distributors and lowering revenues for older agencies that have been selling far more than their planned capacity,” an industry executive said. “The market is getting saturated, so there is limited scope for new distributors to add new customers. So, the current pie will have to be redistributed.”

Over the last few years, the pace of customer addition has far outstripped the appointment of new distributors, which meant older distributors had to lead the market expansion effort. New distributors are still being added, which is why there is a need need to reallocate customers to new distributors.

Total number of domestic consumers stands at 265 million, which is about 95% of all homes in the country, while the number of distributors is 23,833.

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