Cooking gas is one of the most essential needs, from burning firewood to LPG cylinders, we have come a long way towards advancement. It has significant space in our daily life, which costs around 900 to 1200 rupees and sometimes even more based on circumstances. The gas agency owner has luxury vehicles and wealth, but have you ever thought about their schedule and problems they would face during business. These are a few questions which keep rotating across our minds. We only see the surface level work of the gas agency but the reality is completely different. Let's decode it.
* Do you think it is easy to supply cylinders ?
* How do they manage such a huge supply ?
* How much do they even earn ?
* Can everyone open a gas agency ?
* How much commission do they get on 1 cylinder ?
* Is it profitable or losing business ?
The gas agency is a highly respectable and demanding business but not easy to open. According to the government price, on one cylinder the gas agency gets around 70 to 75 rupees commission. Then there are commercial cylinders, which are blue and have a high commission of more than 100 rupees, and mini cylinders get around 30 rupees. There are agencies with 10,000 cylinders and even bigger agencies in urban areas supplying 20,000 cylinders. The gas agency business has less margin, but it is a business of volume and size. If you want to understand everything in just one line, then the concept of 'The more you sell, the better you earn' works best.
The real trouble comes during the permit time, as the business is highly monitored by the government. The cancellation and the procedure for a license is a difficult task, and it has strict rules and regulations. The gas agencies are given based on a tender system and many of them apply it and the government ensures a rigorous scrutiny process. The process also has a category and a reservation system. We can't open an agency anywhere, it needs sure-shot requirements and proper land space. The gas agency business is highly profitable, but it has been working effectively, as the government is involved in this particular business. This involvement makes the business high status and the regulations make it even more important for the business.
Another real problem comes when the gas agency tries to manage the workforce, electricity bills, rents and overall expenses. Gas agency management is extremely hectic and works 24/7 hours with frequent complaints and conflicts over supply. It requires a lot of transport facilities, vehicles, workers and management. From refilling to theft of cylinders and damage to cylinders along with leakages, everything has a cost. The repairs and other unexplored expenses are only taken by gas agencies directly from the customers.
When it comes to revenue, the real wealth is generated from commercial cylinders, as most of the hotels, restaurants, paying guests and accommodation require multiple cylinders. The agencies earn around 7 lakhs to 15 lakhs based on the size of the agency, but the expenses are also heavy along with pressure.
Overall, the gas agencies have an abundance of wealth and a long-lasting business model, which is being worked constantly. The new age problems have also increased with time as many posh colonies established themselves with gas pipelines and billing systems. It has reduced the dependency on gas cylinders and due to Middle Eastern crisis in recent times, has created havoc across India. The reduction and increase in prices along with high consumption has led to massive problems in the gas business. In China, most of the people are using electrical cooking equipment and even India has adopted electric cooking equipment by making modern changes.
