Lok Sabha Question No. 385 (STARRED), answered on 2025-03-27
Subject: Tender issued by OMCs for Bulk LPG Transportation
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Shri Hanuman Beniwal

## LOK SABHA STARRED QUESTION NO. 385 TO BE ANSWERED ON 27 th March, 2025

## Tender issued by OMCs for Bulk LPG Transportation

†*385.  Shri Hanuman Beniwal:

## पेĚोͧलयम एवं Ĥाक ृ Ǔतक गैस मंğी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a)  whether  many transporters who did not fall under the category of MSME provisions were also  given  the  work  order  of  LPG  transportation  in  the  tender  issued  by  the  Oil  Marketing Companies (OMCs) for bulk LPG transportation in the year 2018;
- (b) if so, the details thereof along with reasons therefor; and
- (c) whether the tender of the year 2018 was extended for two years in the year 2023 and if so, the clause and the rules under which such an extension was granted?

## ANSWER

## पेĚोͧलयम और Ĥाक ृ Ǔतक गैस मंğी ( Įी हरदȣप ͧसंह पुरȣ )

## MINISTER OF PETROLEUM AND NATURAL GAS (SHRI HARDEEP SINGH PURI)

- (a) to (c):   A statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (c) of the Lok Sabha Starred Question no. 385 asked  by  Shri  Hanuman  Beniwal,  Hon'ble  M.P.  to  be  answered  on  27 th March,  2025 regarding 'Tender issued by OMCs for Bulk LPG Transportation'.

(a) & (b): Public Sector Oil Marketing Companies (OMCs) are Maharatna Undertakings. They are  Board  driven  commercial  companies  and  publicly  listed  entities  who  enjoy  complete operational freedom in their day to day decision making. OMCs work out their short, medium and long term action plans based on decisions of their respective Boards. Processes involving tenders  and  contracts  for  procurement  of  Goods  and  services  are  commercial  decisions  of  the OMCs  and  fully  within  their  domain  and  competence  and  therefore  they  take  appropriate decisions on them. OMCs design their procurement tenders with an objective to ensure supplies of Petroleum products to consumers in a safe, efficient and economical manner.

OMCs floated bulk LPG transportation tenders in 2018 which fully complied with the MSME Act,  court orders and applicable regulations in force at the time. After finalization of contract w.e.f.  01.09.2018,  some  complaints  were  received  regarding  alleged  misuse  of  provisions relating  to  Micro  and  Small  Enterprises  (MSE)  by  certain  transporters.  To  address  this  issue, OMCs instructed  the  transporters  who  had  bid  under  MSE  category  with  seven  or  more  tank trucks to get their MSE certificate verified by MSME authorities. Several transporters failed to comply,  leading  to  OMCs  issuing  show  cause  notices  for  termination  of  their  contract.  In response,  affected  transporters  filed  cases  in  various  courts.  Based  on  court  orders,  reverification  of  MSME  certificates  of  these  transporters  was  undertaken.  Transporters  who obtained  re-verification  certificates  were  permitted  to  continue  operations.  Some  transporters who did  not  get  their  credentials  verified  have  secured  injunctions/stays  from  courts  on  their offered trucks and have thus been allowed to continue operations.

(c): The bulk LPG transportation contract came into effect on 01.09.2018 and was valid for five years.  The  Covid  pandemic  occurred  during  the  currency  of  the  contract.  At  the  time  of finalization  of  the  fresh  transportation  tender  during  2022-23,  the  Industry  Working  Group (IWG) held discussions with transporters. During the discussion the issue of under-construction Kandla-Gorakhpur LPG  Pipeline and other infrastructure projects and their impact on requirement  of  Tank  Trucks  in  fresh  tender  came  up.  The  tender  document  of  2018  permits extension  to  the  contract  subject  to  consent  of  the  transporters.  Based  on  the  written  consent received  from  individual  transporters,  OMCs  decided  to  extend  the  Bulk  LPG  Transportation Contracts through extension of agreements signed jointly by OMCs and respective transporters. A few transporters filed a Writ Petition challenging the extension in the Madras High Court. The High Court, in its order dated 4 th April 2023, upheld the legality of the extension and, finding it devoid of merits, dismissed the Writ Petition affirming the extension's legality.

*****