Dealers sell the subsidised cylinders on the open market, which leads to diversion where the subsidy is deposited to beneficiaries under direct benefit transfer, but the cylinder is being used by someone else
This move by the state-run oil marketing company (OMC) comes after it emerged that LPG refills under the scheme have been falling. HPCL, however, termed it as an 'outreach and awareness' exercise, it added.
Moneycontrol could not independently verify the report.
The company has auto-booked first refills for at least five million customers (25 percent) subsidised under the PMUY, the report said. HPCL covers 20 million of the scheme’s 80.3 million customers.
This has created problems at the distributor's end as customers are reluctant to accept cylinders they did not book, Pawan Soni, General Secretary, Federation of LPG Distributors of India, told the paper.
Another distributor pointed out that the practise also creates a fake backlog, which impacts their star rating and attracts penalty or licence termination in some cases.
To evade this, they sell subsidised cylinders on the open market, which leads to diversion where the subsidy is deposited to beneficiaries under direct benefit transfer (DBT), but the cylinder is being used by someone else.
The Centre is spending close to Rs 32,989 crore on LPG subsidy in FY20.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.