Flashpoint at Southern Refineries (Image Credits: Unsplash)
Southern India – Bulk liquefied petroleum gas transporters serving Indian Oil Corporation resumed operations late Sunday after a nearly 15-hour halt triggered by allegations of unpaid dues totaling around ₹50 crore. The disruption affected loading from key refineries to bottling plants across the region, but IndianOil quickly assured payments, averting any broader supply issues. Retail LPG distribution remained unaffected throughout the episode.[1][2]
Flashpoint at Southern Refineries
Nearly 1,000 tanker trucks stopped loading at 6 a.m., halting the flow of bulk LPG from facilities in Chennai, Palakkad, Thoothukudi, Mangaluru, and Bengaluru. Each vehicle typically hauls about 18 tonnes, underscoring the potential scale of the interruption in the supply chain to bottling plants. Operators cited prolonged delays in trip payments despite complete documentation, alongside five years of unsettled toll reimbursements.[1]
K. Sundarrajan, president of the Southern Region Bulk LPG Transport Owners’ Association based in Namakkal, highlighted the financial strain. “The dues are worth nearly ₹50 crore,” he stated, pointing to deductions of ₹10 lakh to ₹18 lakh per transporter under the new 2025-2030 contract. These stemmed from alleged discrepancies in bank guarantees, imposed without prior notice or chance for correction.[1]
Roots of the Payment Dispute
The association had raised concerns with senior IndianOil officials as recently as April 9, but saw no resolution. Transporters emphasized the cash crunch: fueling and maintaining a tanker for 1,000 km demands at least ₹60,000 in working capital for diesel, tolls, driver wages, and upkeep. Persistent delays eroded their ability to operate.[1]
Earlier this month, the group warned IndianOil of an impending “unavoidable operational crisis” if dues went uncleared within 10 days. IndianOil countered that the claims misrepresented routine payments, linking holdups to flaws in bank guarantees from an extended prior contract. Partial releases proceeded alongside requests for rectified documents.[2]
Swift Talks Yield Quick Restart
Discussions between IndianOil and the operators bridged the gap rapidly. Loading recommenced after assurances that all pending amounts would clear by Monday and Tuesday. “Partial payments are being released and a timeframe has been given for submitting the rectified BGs,” IndianOil explained in a statement.[2]
An IndianOil official noted that talks started immediately and promised a full fix. The company stressed no disruption reached retail cylinders, with ample stocks nationwide. Transporters confirmed the resumption, easing immediate pressures.[1]
Key Demands from Transporters:
- Immediate release of pending trip payments.
- Clearance of five-year toll arrears.
- Refund of unilateral contract deductions.
- Better communication on guarantee issues.
Stable Supplies Amid Resolved Tensions
IndianOil reaffirmed its focus on seamless LPG access for households, declaring supplies uninterrupted across India. The brief halt exposed vulnerabilities in logistics payment cycles but ended without cascading effects. Operators now await the promised payouts to sustain momentum.
With operations normalized, attention shifts to preventing recurrences through clearer contract terms and faster settlements. Southern India’s LPG network hums on, supporting millions of daily users unscathed by the dust-up.[2]
