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On the back burner: Accountability in domestic LPG service delivery

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Author(s): Narendra Pai, Ashok Sreenivas, Ann Josey Publication Date: December, 2020

The role of Pradhan Mantri Ujjwala Yojana (PMUY) in providing relief to the sections most vulnerable to the ongoing COVID-19 pandemic highlights the importance of the domestic LPG sector now and going forward. However, while India has achieved near 100% coverage of LPG connections, latest NSSO data suggests that nearly half of rural India still relies primarily on solid fuels for its cooking needs. Thus, significant efforts are needed to bridge the gap between connections and sustained use in rural India. Addressing challenges of affordability, behaviour change and quality of supply and service are crucial to ensuring sustained adoption of LPG. These issues are very pertinent now, as urban India may move to other cooking fuel options such as piped natural gas or electricity, leading to a situation where OMCs are left mainly with rural and under-served consumers in the domestic LPG segment.

Therefore, in order to provide long-term quality service, systemic issues relevant to rural consumers need to be identified and remedied through strong accountability mechanisms that go beyond just individual grievance redressal. Presently, such systems in the domestic LPG service delivery appear to be very weak and inadequate. In this report, we study accountability mechanisms in domestic LPG sector, and highlight issues of uneven accountability of OMCs, aspects of distributor viability, and mechanisms that do not take consumer grievance redressal systems into consideration, among other things. In order to effectively link grievance redressal mechanisms and systems of accountability, we highlight that there is an immediate need to ensure consumer information through transparent and detailed billing and data dissemination.

We analyse the Distributorship Agreement and Marketing Discipline Guidelines to highlight the issues in the sector and suggest ideas for improvement. While there are some accountability mechanisms regarding distributors, there are practically no mechanisms and systems to hold OMCs accountable regarding their responsibilities towards consumers and distributors. This is a matter of serious concern, as OMCs are the most critical link between the government and consistent usage of LPG by consumers. Going forward there is a need to amend the guidelines and agreements through a consultative process to ensure they take into account current realities and to incorporate standards of performance targets for OMCs and distributors alike.

Before the flame of Ujjwala dies out completely, these issues need to be understood and addressed so that the massive public investments made towards realising the social and developmental goals do not go in vain.

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