Domestic LPG cylinders flood black market in Hyderabad, sold for Rs 2,000; govt warns against illegal diversions

HYDERABAD: Amid the ongoing LPG crisis, it's domestic cylinders that are now flooding the black market to feed the huge demand for cooking gas. Initially, the limited stock of 19 kg commercial cylinders was sold on the black market for Rs 3,000 to Rs 4,000 each, as opposed to their ususal price of Rs 2,105.

But now with their stock almost wiped out, the 14.2 kg cylinders are being illegally traded for anywhere upwards of Rs 2,000 — more than double the regular price of Rs 965 — officials from the civil supplies dept told TOI.

According to them, these cylinders are being sourced through several channels — by paying a ‘cut' to beneficiaries to surrender their allotments, bribing delivery personnel to divert them to illegal traders when households are found locked, or simply picking up stock from dealers for resale. Their biggest customers: mid-sized restaurants and hostels, say officials.

Over the last few days the dept has reported the majority of cases from areas like Krishna Nagar, Srinagar Colony, Asifnagar, Mehdipatnam, Malakpet, Abids and Mallepally.

100 cylinders seized
"In the last two days alone, we seized at least 100 domestic cylinders from hotels and restaurants. Six cases have been booked against hotels for this illegal act too," said an official from the dept adding that special teams have intensified their inspections to curb the illegal trade. "Strict action will be taken against those involved in the diversion, storage and sale of domestic LPG in the black market, as the crisis deepens," the official from the enforcement wing said. Civil Supplies authorities say they are closely monitoring distribution points and refilling centres to prevent the diversion of cylinders meant for residential use.

Authorised dealers warned that this diversion of cylinders to commercial establishments and black-marketing continues unchecked, it may create an "artificial shortage in the domestic segment, affecting families who rely on LPG". They urged authorities to tighten monitoring at distribution points, track suspicious bulk purchases. "Any large-scale diversion to hotels, restaurants or catering units can disturb the balance and create pressure on the supply chain," said one of them.

At present, Hyderabad has three LPG bottling plants in Cherlapally operated by major oil companies, along with 10 distributors supplying commercial cylinders.

"The city requires roughly 22,000 commercial cylinders daily to meet the needs of hotels, hostels and food establishments. However, nearly 90% of commercial LPG refilling has been temporarily halted to prioritise domestic supply, with exceptions made only for essential services such as hospitals and schools. This gap has put significant pressure on LPG distributors as we are receiving continuous requests and inquiries from hotels, hostels and other commercial establishments seeking cylinders," said Jagan Mohan Reddy, president, Telangana LPG Distributors Association.

Disruption may hit all
Meanwhile, restaurant owners and hostel operators urged authorities to restore the supply of commercial cylinders by at least 50%, stating that the shortage is severely affecting food services across the city. They said that the prolonged disruption could affect not just restaurants but also mess facilities, small tiffin centres, bakeries and street food vendors, many of whom depend entirely on LPG for daily cooking operations.