(INFRALINE) — India’s ministry of petroleum and natural gas has proposed to the Cabinet committee on economic affairs (CCEA) to allow liquefied petroleum gas (LPG) producers to make direct sales to bulk consumers. The ministry has long been advocating the right of direct sales by the producers which include Oil and Natural Gas Corporation (ONGC), Gail India Limited, OIL India Limited (OIL) and Reliance Industries.

At present, direct LPG sales are opened only to marketing companies like India Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL) and IBP Co Limited (IBPL).

The proposal submitted to the Cabinet committee also contains India’s LPG demand supply projections to 2007, which show a deficit of 3.391 million metric tones.

The proposal states that India has sufficient import terminals to help the country overcome its LPG deficit by stepping up import.

Ministry officials said Gail India had sought permission to market LPG in non-domestic sector from April 2004.

Gail wants to market 8.2% of its 1.1 million tonnes per annum output or 90,000 tonnes. It has also sought the ministry’s approval to market LPG produced from its fractionators as auto LPG while importing butane for use as domestic cooking fuel.

Gail is of the view that importing butane will be cheaper than auto LPG, and importing butane for use as domestic cooking fuel. It believes that importing butane will be cheaper than auto LPG.

For auto LPG, the company has proposed to set up 40 to 50 dispensing stations initially in major cities identified as polluted cities by the Central Pollution Control Board (CPCB).

ONGC wants to sell its surplus LPG directly to private parties after meeting the requirement of bottling plants of the marketing companies.