Relief for LPG Distributors! OMCs Agree to Recommend an Increase in Dealership Commission
Gas distributors have received a major reprieve amidst rising operating costs. Oil companies have finally approved an interim hike in dealership commission after distributors raised concerns.
Oil Marketing Companies (OMCs)—namely Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL)—have collectively agreed to recommend an interim increase in the commission for LPG distributors. This was announced by the All India HP Gas Distributors Association (AIHPGDA). However, the proposal for this revision remains subject to approval by the Ministry of Petroleum and Natural Gas (MoPNG).
A meeting took place on October 21 at the Indian Oil Corporation Limited (IOCL) head office in Mumbai between the OMCs and the All India Hindustan Petroleum Gas Distributors Association (AIHPGDA). Following this, on October 22, AIHPGDA Chairman Rajendra B. issued an official letter confirming that the oil companies have agreed to an interim hike in the commission for LPG distributors.
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The association stated, "The management informed us that the proposals for the revision have already been submitted to the MoPNG. The directors have also agreed to jointly recommend an interim increase in the commission within a specified timeframe. We are now awaiting approval from the Ministry."
What is dealership commission?
Dealership commission refers to the amount paid by Oil Marketing Companies (such as IOCL, BPCL, and HPCL) to their gas distributors or agencies for the sale and safe delivery of LPG cylinders. This covers all associated costs, ranging from storage at the warehouse to the final delivery of the cylinders.
What is the current commission amount? Under current regulations, distributors in India receive a commission of approximately ₹73 per 14.2 kg domestic LPG cylinder. Of this amount, about ₹30 to ₹35 is earmarked specifically for delivery charges. Gas distributors have long been demanding an increase in this commission.
According to Chairman Rajendra B, costs have risen significantly over the past few years—ranging from the salaries of delivery personnel to the price of petrol and diesel. Warehouse rents have also increased. Consequently, the current commission has made operations a loss-making proposition for the distributors.
Following the consensus reached at the meeting in Mumbai, the proposal will now be submitted to the Ministry of Petroleum and Natural Gas for final approval. Once the Ministry grants the green light, the new, higher commission will come into effect.
