Appeal For Revision Of LPG Distributor’s Commission As Per IIM(A) DeNovo Study, 2016
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Dear LPG Distributors,
The recent DeNovo study conducted by Indian Institute of Management Ahmedabad ("IIMA"), was constituted at the instance of the Ministry of Petroleum and Natural Gas ("MoPNG") in early 2016. This followed the first and original DeNovo study constituted in 2010, recommendations of which were implemented on 7th October 2012, the validity of which was noted to be 5 years.
The aforementioned DeNovo study was initiated well in advance to ensure that the recommendations of this second study is available with the MoPNG prior to the expiration of the aforementioned 5 year period.
We understand that the process of discussions with all stakeholders including Oil Marketing Companies, various distributor associations, as well as individual distributors has been completed and summary of recommendations compiled in the report have been submitted to the MoPNG, Government of India, New Delhi and awaits implementation.
In this extended delay period of 14 months since conclusion of the 5 year period, distributors across India are facing reduced profitability and in some cases losses, due to unprecedented increase in expenses and capital requirement which is unsustainable, even in the short term. Since recommended increase in distributor commissions have historically been made effective prospectively, such increase in expenses incurred during the delay period is a direct loss of capital for aggrieved distributors.
Therefore, there is an urgent and overdue need for revision in distributor commissions.
We therefore urge you to join in the campaign for revision of commission to LPG distributors based on the DeNovo Study, 2016. Whilst this petition is being initiated by the All India HP Gas Dealers Association, we welcome LPG distributors of other Oil Marketing Companies, including Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL), to support this movement.
Your e-signatures will enable us to take up the matter with the Honourable Minister of Petroleum and Natural Gas, Shri. Dharmendra Pradhanji, for immediate implementation of the recommendations.
Looking forward to your prompt response.
For All India HP Gas Distributors Association
Kumar D. Advani B. Rajendra
President General Secretary
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