BUSINESS
The gas distribution company is looking at waiving off Rs 5,000 deposit and charging a rent of Rs 25-50 per month; Haryana Gas also feels it's more workable solution to increase PNG user-base
Looking to push up the conversion rate from liquefied petroleum gas (LPG) to piped natural gas (PNP) by domestic consumers, some of the natural gas distribution companies like Indraprastha Gas Limited (IGL) and Haryana City Gas Distribution Ltd (HCGDL) are considering waiving off the deposit amount of Rs 5,000 on every connection and replacing it with a rental of Rs 25-50 per month.
While Haryana City Gas has yet to thoroughly study the financial implication of such a move, E S Ranganathan, managing director of IGL, told DNA Money that the gas company is likely to do away with the upfront deposit on every PNG connection in the Delhi-National Capital Region (NCR) soon.
He said the plan has to be approved by his finance department and the Petroleum and Natural Gas Regulatory Board (PNGRB). It will not require the petroleum ministry's nod.
The IGL chief has even worked out the math of such a move.
"What we are thinking is, suppose we charge as rent of Rs 25-50 a month, we can waive the Rs 5,000 paid upfront for each connection. This is anyway the customer's money, which is returned when his service is disconnected," he said.
Ranganathan said currently IGL earns an interest of 6% on Rs 5,000 per year, which comes to Rs 300. He said this annual Rs 300 income per customer from the deposit could translate into a rent of Rs 25 per month.
According to him, this will make it easier for new users to start using PNG, for which IGL has already laid the pipeline in areas under its jurisdiction.
For instance, IGL, which has over 6.76 lakh customers in Delhi-NCR, has already spent aggressively on infrastructure to supply natural gas to domestic users, but in many areas, people were still not voluntarily shifting to PNG.
Close to 2.5 lakh residents in these areas are still to make the switch; "there is a pipe reaching right till their homes, but since they have not opted for it, we have not connected it to their house".
Ranganathan feels one of the reasons for people not going in for the PNG connection was the upfront deposit. Initially, he tried to come around this problem by providing easier payment option of equated monthly installment (EMI) to customers but failed to make much dent with it.
"When we went for EMI scheme of three installments of around Rs 1,500. People never accepted it. Now, we have introduced an EMI of Rs 500 per bill. This, too, is not working. It's a human tendency. For instance, if you are paying Rs 800 per month and after shifting (to PNG), I suddenly give you Rs 700 bill for gas plus Rs 500 EMI, you will think I was spending Rs 800 and now I am spending Rs 1,200 per month and think it is expensive," said IGL head.
Rahul Chopra, CEO of HCGDL that distributes PNG in Gurugram, said his company will also evaluate the option and take a decision.
He believes the monthly rental option was a more workable solution than deposit model to increase the use of PNG. "I think it is workable and will help increase the conversion rate (from LPG to PNG)".
Citing an example, he said that Haryana Gas had laid pipelines in front of many apartments in Gurugram, where conversion rate was barely 30-40%. "One of the reasons for this was high deposits. Also, many people do not opt for PNG because they are tenants. If there is monthly rent, then they can just take the connection and pay rent for it," he said.
Today, Haryana City Gas has 13 compressed natural gas (CNG) stations and 15,000 PNG domestic connections in Gurugram. Chopra said his company was targeting PNG connections of up to one lakh in the next few years. "Gurugram has a population of around 4-5 lakh and a 20%-30% penetration would help us break-even faster".
Mahanagar Gas Ltd (MGL), Gujarat Gas Company Ltd (GGCL) and others also take an upfront deposit for PNG connection and have not removed it yet.
Zerodha's Nikhil Kamath, known for favouring renting, buys his 1st house; here's why
Meet Ratan Tata’s favourite chef, who began his career in a garage, now he is...
Rajinikanth to compensate producer's loss for Vettaiyan failure? Here's what we know
Meet woman behind the voice of Apple's iPhone 'Siri', never paid for it due to...
Who is IPS Anurag Gupta, acting Jharkhand DGP removed by EC ahead of Assembly polls?
Meet Vijaya Kishore Rahatkar, the newly appointed chairperson of NCW
Watch: Rishabh Pant's monstrous 107m six against Tim Southee leaves New Zealand players stunned
Mukesh Ambani's driver earns Rs 2400000, he is fully trained for...
Why do air hostesses wear high heels?
Mukesh Ambani brings iconic London brand to Indian market, opens its first outlet in...
Delhi pollution: Tips to protect your lungs as AQI levels rise
Donald Trump receives support from THESE WWE legends, trio mock Kamala Harris, watch viral video
'Kaunsa chahiye, bol?': Rohit Sharma's witty response to fan's query on changing IPL team goes viral
Karwa Chauth 2024: Trending mehendi designs idea to elevate your festive look
Jharkhand elections 2024: Hemant Soren's JMM, Congress to contest 70 of 81 seats
Meet man who runs India's largest bank worth Rs 1283000 crore, not from IIT, IIM, his salary is...
IND vs NZ: Rishabh Pant goes past MS Dhoni, becomes fastest Indian wicketkeeper to....
Karva Chauth festival set to generate Rs 7000 crore more revenue than last year, it will be...
Karwa Chauth 2024: 5 fasting tips for women with diabetes
Elon Musk vs Jeff Bezos: Which billionaire will lead the space race?
This actor who lived in chawl for 33 years, would have owned half of Andheri if...
Lawrence Bishnoi gang member arrested for ‘plotting to kill’ Salman Khan
‘We faced a…’: Ratan Tata on his parents' divorce, grandmother's support and breakup
Baba Siddique killed ‘because of’ Salman Khan? Salim Khan breaks his silence
Drone from Lebanon targets Israeli PM Benjamin Netanyahu's home days after Hamas chief's killing
When angry Sunny Deol allegedly tried to stab Hema Malini with KNIFE for marrying Dharmendra
'Not all that is hidden...': Son Zeeshan shares cryptic post after Baba Siddique's murder
Good news for Mukesh Ambani as Jio Financial earns huge profit of Rs….
Karwa Chauth Sargi Time 2024: Auspicious time, significance, history of festival
Elon Musk is offering up to Rs 5,000 per hour for THIS job, it is...
Spooky space! NASA reveals formation of human face on Mars
'Mind blowing': Sibling duo's cover of 'Tum jo aaye' leaves netizens spellbound, WATCH viral video
Delhi-NCR's air quality turns 'very poor', situation likely to worsen till...
This college offers placements worth Rs 6500000 to graduates, is listed among top...
Vistara's Delhi-London flight diverted to Frankfurt after bomb threat
Mohammad Rizwan set to replace Babar Azam as Pakistan's ODI and T20I captain
Viral video: Little girl's adorable dance to 'Aayi Nai' impresses internet, watch
Gujarat: Vadodara man performs CPR to save snake's life, netizens say, 'Barodians can do anything'
Mukesh Ambani's brand forces Tata Group company to reduce its product price, revenue hit by...
DNA TV Show: Mumbai Police receives threat message seeking Rs 5 crore from Salman Khan
Shraddha Kapoor breaks silence over credit battle for Stree 2's success: 'I believe it was...'
Who is IAS Sanjeev Hans, arrested by ED in money laundering case?
Gautam Adani donates Rs 1000000000 to THIS Indian state for...