The Great LPG Fraud

Almost all of Mizoram’s LPG agents have 5-star ratings because they report to Indane that they deliver gas refills within two days of consumers booking them. But very few, if at all, book gas refills in the first place, and instead stand in long queues at designated points. What’s more, distributors have evidently inflated the number of refills consumers have availed of, opening a wide door for cylinders to be diverted into the black market.

Long lines for domestic gas refills are a norm in Mizoram

Earlier this month, three LPG distributors in Aizawl received show-cause notices from the Indian Oil Corporation’s Integrated Indane Area Office at Hospital Road in Silchar.

The show-cause notice to Vanbuangi Gas Agency said one of its customers booked a refill cylinder on July 15. The computerised system through which Indane keeps a tab over its distributors showed the refill was delivered and a cash memo generated. The system also showed that a refill was also delivered to the same customer on August 2. But the customer never received the refills or the cash memos.

“It is ascertained,” the IOC notice said, “that booking and cash memo was cancelled, then, fresh booking has been done by yourself and new cash memo generated and refill cylinders were delivered. It is clear cases of fake booking, fake cash memo and fake delivery.”

The show-cause notice to Suakchhunga was a bit different. It said three SMSes were received by one of its customers on August 31 – one was to confirm his booking, another was a cash memo, and the third was a confirmation of refill delivery. But the customer in question never made any booking, and dutifully complained to Indane.

“It is clear from above that you are making fake bookings in the name of consumer, making fake cash memo and also making fake deliveries,” the Indane office said.

The show cause notice to MIZOFED was fairly similar. It said Indane’s internal system showed one of MIZOFED’s customers booked a refill cylinder on August 30 and the refill was delivered that same day. But the customer never made any booking and no refill was ever delivered to his home. Meanwhile, another customer booked a refill the following day – August 31 – but he received an SMS saying his booking was cancelled. But the internal Indane system showed the booking was never cancelled and there was a pending refill delivery for the same day. Indane’s notice to MIZOFED charged the gas agent with “making fake bookings in the name of consumer and also doing fake delivery” and also that it was clear there are anomalies in bookings, refill deliveries and generation of cash memos.


What could it imply?

These notices suggest several things.

One is that bookings for refills (which can be done online, through SMS, phone call or even applications downloadable to Android and iPhones) come to nothing as a distributor can tell a customer the booking was cancelled when it never was. Sometimes, the distributor may not even tell the customer it was cancelled, but rather simply report it has been delivered when it never was.

Secondly, some distributors have evidently used customers’ details to “book” refills and then report to the internal system they have delivered the refills (mostly on the same day) when there was no real booking and no real delivery in the first place.

This could further lead to distributors getting five-star ratings from Indane because they themselves report to the company using a mix of fake bookings, fake cash-memos and fake delivery reports.


So what if it’s 5-star?

Indane put the rating system in place to inject market-competiveness in its network of distributors across the country as it introduced a portability option for customers. In other words, a customer can look at the ratings of each distributor within his or her area and chose the distributor that can actually deliver to his or her registered address most quickly.


5-star Mizoram

According to Indane’s transparency website, there are 20 cooking gas distributors in Aizawl District. All of them except V Neihkunga Gas Agency have 5-start distributor ratings or “excellent”, which means they complete 85% or more of deliveries within at least two days of customer’s bookings.

It is largely the same for other districts. Seven of eight cooking gas agents/distributors in Lunglei too have 5-star ratings. Champhai’s six gas distributors all have 5-star ratings. All four gas distributors each in Kolasib, Lawngtlai, Mamit and Serchhip districts too have 5-star ratings. The two gas distributors in Siaha too both have 5-star ratings.


Best in India

It gets even more interesting when one looks at the all-India comparison of distributor’s ratings, which accounts for all 34 states and Union Territories.

Mizoram had the second-best gas distributors when taken as a whole among all these state and UTs between July to September this year, with 97% of gas distributors being rated 5-star. It was even better in the April to June period at 99%. What about the January to March period? 97%.

They were all very good last year as well, at an average of 96% in the last six months of 2015! Which means Mizoram’s gas distributors were, as a whole, the best gas distributors in the entire country throughout the second half of 2015!!


The queues continue

Why then do residents throughout the state continue to queue up for cooking gas refills? Unfortunately, the Indane website does not provide the answer, although it does contain the company’s Citizen’s Charter that states “LPG distributors deliver filled cylinders at the registered address to the customers residing in their normal area of operation and take backs empty cylinders.”

One explanation can be that those who book refill cylinders form a miniscule micro minority in the state who, for some reason or the other, have been keeping it a secret from their neighbours.


Hundreds of bookings

But that does not seem to be the scenario when one trawls through Indane’s transparency portal.

Take the example of Vanbuangi Gas Agency: the portal shows no less than 274 customers have booked at least 8 refills between April and end-September this year alone. Eight cylinders is one more than the national average consumption of domestic LPG cylinders, which is seven cylinders per consumer per year. In fact, at least seven of Vanbuangi’s customers have booked 12 refills in the same period, which means two cylinders every month on average. Most of these refills were, as the 5-star ratings bear out, delivered on the same day.

MIZOFED meanwhile has 23 customers who have booked an average of 12 refills each in the past six months, and at least 395 customers who have booked 8 refills in the same period.

Suakchhunga has no less than 118 customers who have booked an average of two gas refills in the past six months, and at least 801 customers who have booked at least 8 refill cylinders in the same period.

These figures are not limited to the three gas agents recently served notices by the IOC: although figures vary from agent to agent, most have scores of customers who have availed of as many as 12 refills in six months, and hundreds who have availed of refills above the national annual average consumption. Most of these cylinders have also been marked as delivered, many on the same day.


Booking? What booking?

This weekly spoke to dozens of consumers in Aizawl and asked them whether they book refills, and all of them said they do not, and simply collect them whenever distributors — or local volunteers — announce gas is going to be distributed in their neighbourhoods. No one seems to have any idea that gas refills can be booked, much less delivered to their homes.

It also spoke to several people who were marked on Indane’s website as having availed of more than the average annual national consumption of eight cylinders.

Among them is V lalhruaitluanga of Aizawl’s Chaltlang locality. Indane’s transparency portal lists him as having booked and received 17 refills from Zoram Indane Service between April 1, 2015 and March 31, 2016. When he cross-checked with his consumer card, however, V Lalhruaitluanga found he took no more than 11 refill cylinders in the same period.

Another of Zoram Indane’s consumers, H Laltanpuia, is also marked as having availed of four refills between April and now. However, his consumer card shows he availed of only three cylinders (the third entry in the consumer card, dated August 6, was marked on the Indane website as August 22).

It is much the same story in other places as well. One consumer in Aizawl’s Electric Veng, who gets his refills from Suakchhunga, is marked as having availed of 12 cylinders over the past six months. However, his consumer card shows he availed of no more than 10 cylinders in the same period. Another consumer from the same locality is also marked as having availed of 10 refills, but his consumer card shows he availed of no more than eight refills.

Neither of these two consumers wanted to be identified because of fears the LPG agent would starve them of future refills.


Where is black from?

So if distributors book cylinders in the name of consumers, make fake deliveries and generate fake cash memos and submit these to the parent company as these examples as well as IOC’s show-cause notices mentioned at the beginning of this story show, what happened to the actual gas cylinders?

It is a fact that filled-up gas cylinders are available in the black market, that advertisements in some newspapers offer empty gas cylinders for sale and that the price of a gas cylinder in the black market has touched Rs 1600.

Zodinpuia, a student union leader, said he recently searched all day for a gas cylinder and eventually found one for Rs 1,600, paying a coolie an extra Rs 50 for delivering it. When contacted, he said a collie approached him asking if he was looking for gas, and when he said yes, the coolie told him he had one.


What they said

Mizoram Indane Distributors’ Association (MIDA) general secretary H Zosangliana said gas refills are delivered at a “common point” and not at consumer’s registered addresses because of the state’s terrain, which makes it impossible for many houses to be reached in vehicles due to long, narrow stairways. He said IOC too has not been able to come up with a better delivery method.

He admitted consumers do not book refills but distributors themselves enter these bookings and delivery dates. Booking facilities being unavailable in the local tongue is also a problem, he said.

When asked if the mismatch in number of refills actually availed of by consumers and that registered with Indane might not lead to a thriving black market, Zosangliana said errors crop in sometimes and sometimes distributors manage the books depending on their stock of empty cylinders. He said he at least does not indulge in black marketing and usually correct such discrepancies if consumers complain.

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