OMCs go on digital drive during lockdown; govt sets March 2021 deadline

Indian Oil Corp, BPCL, and HPCL together have 278.7 million LPG customers, being served by 24,670 LPG distributors.
The Union government has asked oil marketing companies (OMCs) to go for around 100 per cent digitalisation on payments for liquefied petroleum gas (LPG) by March 2021. Though a step towards Digital India, the move is likely to have an impact on more than 80.3 million Pradhan Mantri Ujjwala Yojana (PMUY) consumers, majority of whom are not exposed to digital transactions.

According to multiple sources, among the three companies Indian Oil Corporation (IndianOil), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation, HPCL has already initiated steps towards achieving this target by “asking distributors for compulsory digital transactions”.  Though 100 per cent seems to be unrealistic, companies aim to touch around 60-70 per cent,” said a top official from an OMC.

“The government has directed us to do it in a phased manner starting from June. At present, digital payment for cooking gas is around 18-21 per cent, we have asked the distributors to increase it to 25 per cent with immediate effect and then a phase-wise increase to 100 per cent by March 2021,” said a senior official from an oil marketing company. The three oil marketing companies together have 278.7 million LPG customers, being served by 24,670 LPG distributors.

“There is a revised target for cashless/digital payment for LPG refill delivery. Hence, your revised target of cashless/digital transaction is 100 per cent for FY 2020-21. Currently this month's target is 25 per cent,” HPCL informed its distributors. HPCL has a total of 7.7 million LPG consumers, while IndianOil has 13.1 million and BPCL has 7.1 million as of April, according to the data available with the Petroleum Planning and Analysis Cell.

“Cashless payments are safe, convenient and transparent. In current pandemic times, it solves problems associated with carrying and exchanging currency which passes through multiple unknown hands. Even for digital transactions, contact less devices and methods are being encouraged,” HPCL said in response to Business Standard queries. Neither the petroleum ministry, nor the other two OMCs responded to questions.

“HPCL has always been at forefront of adopting new technologies to improve customer experience. The cashless payment methods were included at our retail outlets and LPG refill, many years ago. In the current situation, HPCL is proactively providing solutions, creating awareness and encouraging customers to use cashless mode of payments for LPG refills and at retail outlets,” HPCL added.

State-run OMCs sold nearly 23.1 million tonne packed domestic LPG during 2019–20 and 16.1 million new domestic customers were enrolled too. When asked how distributors are adopting the new directive, Pawan Soni, general secretary, Federation of LPG Distributors of India, said, “Conversion from cash to digital/cashless payment mode will require a major behavioral change in the age-old habits of the customers. Things, like customer awareness, ease of making digital/cashless payment, incentive schemes for both the customers and delivery personals and innovative ideas like pre-delivery digital payments, QR Codes printed on refills will play the key role in encouraging contactless digital payment as the option of payment remains with the customer.”

HPCL dealers, however, are under greater pressure. “We are under pressure to accept digital payments and our agency has reached 91 per cent mark. People in a small city, like ours, is using online medium like GooglePay, PhonePay and Paytm,” said Papu Kumar Saoo, Pappu HP, Gas Gramin Vithrak, a distributor from Jharkhand, who has done maximum online transaction for HPCL.

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