How proposed interoperable LPG delivery system will guarantee timely cylinder supply to households

The proposal comes after a high-level expert committee constituted by the PNGRB found that grievances pertaining to delivery delays dominated the over 17 lakh LPG-related complaints that are registered annually. Nearly half of all complaints recorded by the OMCs related to cylinder delivery issues, with consumers often waiting days or even weeks beyond the currently stipulated 48-hour delivery norm. With over 32 crore domestic LPG connections and nearly 100 per cent coverage nationwide, the country now faces the challenge of ensuring service excellence, the regulator said.

Current system and proposed changes

Currently, a consumer is locked into one OMC’s ecosystem. For example, a consumer holding an LPG connection with Indian Oil Corporation (IOC) can only get refills from an IOC distributor. If that distributor faces a stock out, logistics issue, or any outage—like a bottling plant breakdown or transport strike—the consumer’s cooking gas refill is delayed until the issue is resolved. At present, the onus is on that specific OMC—IOC in this example—and the particular distributor to meet the demand.

There is no real option for the consumer to seek alternative supply in such a scenario without formally switching the connection to one of the other two OMC. This can be problematic during supply disruptions or a surge in demand—like during the festival seasons or at times of natural disasters—when one OMC’s network might be overstretched while another’s may have spare capacity.

The proposed framework is a cross-company service mechanism, which means that the distributor fulfilling the order in place of the designated distributor can be of any OMC. In the above-mentioned example, if the designated IOC distributor is unable to supply the cylinder within 24 hours of the booking being made, the order will be automatically transferred to the nearest available distributor of any of the three OMCs—IOC, Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL)—that supply LPG to households.

The rationale for interoperability

The proposed model is in line with best practices in various other countries. For instance, in the European Union countries, uninterrupted energy supply is a protected consumer right, with mandatory “supplier of last resort” systems ensuring continued service even if one service provider fails.

According to the regulator, the rationale for such a mechanism is rooted in the principle of universal service obligation as all the OMCs ultimately have the same mandate from the government—to ensure that cooking fuel reaches every household reliably at an affordable price and in reasonable time. The three companies operate under the administrative control of the Ministry of Petroleum and Natural Gas (MoPNG), sell LPG at uniform prices, and are collectively accountable for the country’s energy access goals. This essentially means that from the consumer’s perspective, LPG supply from these companies are fungible.

“From the consumer’s perspective, Indane (IOC’s LPG brand), Bharat Gas (BPCL), or HP Gas (HPCL) cylinders serve an identical purpose; they are standardized 14.2 kg cylinders with identical regulator fittings and gas composition. In effect, these brands are substitutable from a user standpoint, even if the commercial entities are different. This interchangeability is what allows us to envision a cross PSU service solution,” the PNGRB said.

“In India’s context, all three LPG companies are government owned and often collaborate on Infrastructure sharing. It is thus logical that they should collectively guarantee the service to every LPG customer. If one’s network hits a snag, the others can immediately fill the gap. This approach would transform the customer experience by making the service provider boundaries invisible to the consumer during emergencies or delays,” the regulator said.

The evident benefits

The interoperable LPG service model could significantly reduce customer complaints by ensuring timely delivery of cooking gas cylinders, particularly in underserved regions. The PNGRB believes that such a model would ensure equitable access during supply disruptions, and will particularly benefit rural and poor households. It is also expected to empower consumers by reinforcing the principle of service as a right, not a privilege.

This mechanism is also bound to promote competition among the three OMCs, and could lead to an improvement in service standards. The model, if implemented effectively, can meaningfully reduce regional service disparities by optimising and synergising the existing delivery infrastructure across the three companies and their LPG distributors, thereby improving LPG coverage in hard-to-reach areas without requiring massive new investments. It could potentially lead to cost efficiencies for the three OMCs through shared logistics, improved asset utilisation, and better demand forecasting.

Proposed implementation roadmap, likely challenges

According to the regulator, the PNGRB Act lays a strong legal and regulatory foundation that can support the implementation of an interoperable LPG service system in India. “…the Act’s consumer-first approach, focus on infrastructure access, and enforcement powers collectively make it a suitable instrument to operationalize and govern an interoperable LPG delivery framework, ensuring reliable and timely service to consumers across the country,” the PNGRB said.

The regulator has proposed a “carefully phased approach” beginning with pilot programmes in select urban and rural areas to test coordination systems and inter-company processes. Lessons from the pilot will guide the operational, financial, and technological framework for a seamless nationwide implementation.

“It is advisable to pilot the cross-service mechanism in a few areas first, to iron out practical difficulties. The pilot could focus on a mix of urban and rural settings—for example, one metro city and one or two districts known for supply challenges. During the pilot, the coordination systems and inter-company processes can be tested. KPIs (key performance indicators) such as average delivery time, reduction in complaints, and feedback from consumers and field staff would be collected,” the PNGRB said in the concept paper.

The PNGRB, however, has not proposed any implementation timeline yet—neither for the pilot projects, nor for a full-fledged rollout.

Any major change in service delivery mechanisms and models is bound to face challenges and teething troubles. A major concern that could pose a challenge to implementation would be the issue of cylinder ownership and branding, as each LPG provider uses uniquely marked cylinders. This could make cylinder tracking and maintenance complicated exercises in the interoperability mechanism as cylinders of one company will not just go to its consumers, but to other fuel companies’ customers as well.

“The absence of a centralized digital platform further complicates real-time booking redirection, subsidy tracking, and dispute resolution,” the PNGRB said, adding that regulatory gaps also pose hurdles, as current laws do not mandate interoperability or clarify liability in case of service failures. Additionally, resistance from distributors is expected due to concerns over revenue loss, logistical complexity, and dilution of customer ownership.