08/07/2026
To:
The Ministry of Petroleum & Natural Gas,
Government of India
Submitted by:
LPG Distributors Association of India (LDAI)
Subject:
LDAI respectfully submits this policy memorandum for Ministry consideration. The memorandum highlights national‑level policy concerns affecting LPG distributorships and requests structured intervention to protect consumer service, safety, rural reach and long‑term distributor viability. The submission is constructive; it does not oppose reform, digitalization, safety measures, PNG expansion or Government policy objectives. It seeks to ensure that such reforms remain practical, economically sustainable and fair to consumers, Oil Marketing Companies and distributors. In his representation to the Hon’ble Prime Minister, We highlighted the urgent need for a scientific review of the LPG distributor commission and a comprehensive methodology revision to reflect actual operational costs and ground realities.
1. EXECUTIVE SUMMARY
India’s LPG distribution network is the essential last‑mile clean‑energy delivery system supporting household cooking, PMUY beneficiaries, rural consumers and safety. Distributors have invested heavily in infrastructure and manpower. The operating environment has changed – costs have risen, digital mandates have increased, and energy transition (PNG/EV) poses viability risks. Policy responsibilities have expanded faster than remuneration, threatening consumer service and distributor sustainability.
2.LDAI requests the Ministry to initiate a comprehensive policy review focusing on commission revision, viable‑limit reassessment, delivery‑interlock flexibility, PNG‑migration safeguards and compensation for mandatory services.
3. WHY MINISTRY‑LEVEL INTERVENTION IS REQUIRED
Many distributor issues stem from national policy design, remuneration structure and energy‑transition planning. The Ministry must guide a structured review so reforms do not weaken the last‑mile network that implements LPG policy at the consumer level. The FLDI appeal specifically calls for Ministry‑led scientific cost study and an independent committee to review commission methodology.4. KEY POLICY ISSUES REQUIRING REVIEW
4.1 Commission Revision & Economic Sustainability
Distributor commission must be revised scientifically to reflect present‑day operating costs (salaries, diesel, digital systems, safety compliance). The FLDI representation emphasizes that the current commission formula is outdated and based on theoretical assumptions, not actual operational realities.
4.2 Reassessment of Viable Limit & Ceiling Limit
Existing norms were framed under older conditions. They must be reassessed based on current cost structure, active customer base, refill volume, rural difficulty and PNG impact. New distributorship appointments should not make existing distributors unviable .4.4 DAC / OTP & Delivery Interlock Reform
Strict authentication can cause hardship in rural/low‑network areas. The Ministry should allow flexible exception mechanisms for genuine cases, ensuring uninterrupted service – aligning with practical operational guidelines.
4.5 LPG‑to‑PNG Migration Policy
PNG expansion should be voluntary and transparent. Distributors should not bear the burden of cylinder return without compensation. We appeal stresses protecting distributor viability during energy transitions.
5. SPECIFIC REQUESTS TO THE MINISTRY (added reference to FLDI appeal)
Constitute an independent national cost study on LPG distributorship Direct OMCs to review distributor commission based on present‑day operating costs and adopt a scientific commission formula. Reassess viable limit and ceiling limit using current cost, refill volume and geography‑based parameters. Create a separate remuneration/reimbursement framework for mandatory services (documentation, e‑KYC, safety).Review delivery‑interlock & DAC/OTP systems to include rural flexibility and genuine‑case exceptions. Frame national guidelines for PDC that are practical and risk‑based. Issue policy that NFR/ARB/Beyond LPG sales remain voluntary and consumer‑choice based. Frame a national LPG‑to‑PNG migration policy protecting distributor viability. Direct OMCs to review new distributorship appointments in saturated areas. Establish a Ministry‑OMC‑LDAI standing consultation mechanism
Issue Concern Request Ministry Action on Rising costs , commission revision, Viability Existing norms outdated Review viable & ceiling limits based on current costs. Mandatory services Unpaid documentation & safety work Frame remuneration/reimbursement policy. DAC/OTP Delivery delays in rural areas Introduce flexible exception mechanism.PNG migration Viability risk during energy shift. Frame national migration policy protecting distributors.New appointments Market saturation Require viability assessment before new appointments.
