Indians have witnessed several successful privatisations of companies in several industries. The private sector in the oil and gas industry is one of the major ones in the country. While privatisation can bring several benefits to the sector, there are certain challenges that are also present in the privatisation of gas companies.
Increased efficiency to better customer service and a competitive market can be some of the benefits of privatization in the LPG industry. However, the transition is unlikely to be a seamless one. In this blog, we take a look at the benefits of privatisation in the LPG industry and the challenges that come along.
A private gas agency dealership under privately-owned gas companies operates in a more competitive and market-driven environment in comparison with the public sector. To survive the fierce competition, private companies operate more efficiently to thrive in their respective industries. This is a great advantage for customers since these private companies have a more efficient delivery process and service because of their greater incentive to improve customer experience and earn loyalty.
As mentioned in the prior pointer, private gas companies are typically more customer-focused than public entities. This is because such companies need to maintain their customer base to remain profitable. This generally means a better focus on the customer experience, right from the availability of products (gas cylinders, and related products) to the quality of the delivery and post-delivery services. A private gas agency dealership strives to provide high-quality customer service to attract and retain customers by investing in customer support, training, and technological innovation.
In the public sector, there is hardly any competition between the entities, which can lead to reduced emphasis on improvement, and ultimately stagnation of quality services. With privatization, there is increased competition in the gas sector. When more than one private companies compete for occupying the majority of the market share, they are more likely to bring down prices and offer better services to attract customers. Competition can lead to more efficient and cost-effective services, ultimately benefiting consumers.
In India, the market for LPG is ever-increasing. The sheer scope of growth in the sector gives investors the opportunity to invest and grow in the industry. Private companies have access to capital markets and can raise funds to invest in research and development, and technology.
This means private companies are more likely to put money into improving the infrastructure, product lines, and overall customer experience, which is often marginal in the public sector. Long-term investments in the private gas sector are more likely to happen because investors and stakeholders have a vested interest in ensuring the sustainability and profitability of a private gas agency dealership.
With an array of advantages, there are certain challenges that come with the privatisation
It is debated that privatisation can lead to the risk of monopolies in the LPG sector, which means certain companies may dominate the market, making it difficult for new companies to enter. However, it can be rightly argued that the competition often allows bigger companies in the market to rethink and retrace their ways of operating in the sphere.
Privatisation can lead to higher prices for consumers. However, with the increasing strata of the high-income middle class in India, market studies show that consumers are willing to pay the price in exchange for quality products and services. Since most private companies need to generate profits to remain viable, earning the goodwill of the customers is their main priority. Besides, private companies do not price products excessively higher than that publicly-controlled prices, owing to the regulations and controls.
It is believed that privatisation can lead to environmental concerns. While it can be considered valid for uncontrolled companies, the same does not apply to renowned companies with prominent industry presence. Today, companies like Shivgas take sustainable measures as well as contribute to rebuilding the environment. Following environment-friendly manufacturing and bottling processes, a private LPG gas dealership also carries out safe environment and workforce safety practices to minimise its impact on the environment.
Liquefied Petroleum Gas has become a popular fuel source across Indian households and industries. A clean fuel, LPG is quickly becoming an alternative to fossil fuels such as coal and oil. With a high calorific value and producing no smoke, LPG is truly emerging as a viable substitute.
With over 30 years of industry presence, Shivgas is one of the leading private LPG gas companies in India. Catering to the fuel needs of the industrial, commercial, and domestic sectors, we are the fastest-growing gas company in eastern India.
Our mission is to offer the best quality service to our customers and become the most reliable gas company in India. We offer private gas agency dealership to enthusiastic individuals who want to take part in the growing industry and become part of the energy transition in India.
At Shivgas, our mission is to be the most trusted LPG company by offering the highest quality services to our customers. Our range of LPG cylinders includes 17kg, 21 kg, 33 kg industrial cylinders, 33kg liquid off-take, and 425 kg cylinders. We also cater to bulk LPG requirements with utmost safety and promptness.
With the utmost dedication to meeting the market demands, we offer the ultimate assistance and support when it comes to being responsive to customer queries and issues, as well as while setting up a dealership.