Kolkata's Underground LPG Trade Adapts to Soaring Grey Market Prices
In Kolkata, the clandestine trade in 'kata gas'—domestic LPG siphoned from household cylinders—has evolved significantly. Operators are now increasingly diverting this pilfered fuel into commercial cylinders, driven by skyrocketing prices in the grey market. This shift marks a new phase in a long-running illegal practice that exploits supply gaps and regulatory loopholes.
Price Surge Disrupts Informal Fuel Ecosystem
On Friday, the unofficial market price for a 19-kg commercial LPG cylinder reportedly reached Rs 4,000 to Rs 5,000, a figure several times higher than the official rate. This dramatic increase has made it far more lucrative for illegal operators to refill commercial cylinders rather than supply fuel to smaller users, such as auto-rickshaw drivers. The spike has severely disrupted the informal ecosystem that once relied on kata gas as a cheap alternative fuel.
Auto drivers, who previously used the pilfered LPG to cut costs, now find it unaffordable. Many are forced to return to purchasing auto LPG from authorized stations, impacting their livelihoods. Asim Kar, an auto driver on the Behala-Gariahat route, shared his experience: "We always used kata gas because it gave better mileage and was much cheaper. But on Thursday, we were shocked to see the price rise three to four times. Now we have no option but to buy LPG from fuel stations."
Thriving Illegal Operations Amid Supply Disruptions
The illegal trade, which has persisted for years, is thriving due to supply disruptions and rising demand. Sources indicate that clandestine refilling operations are active in multiple areas, including:
- Anandapur to Mukundapur
- Mahishbathan
- Dum Dum
- Barasat and surrounding suburban regions
The modus operandi involves manually siphoning LPG from domestic cylinders—containing 14.2 kg of fuel—into larger 19.6 kg commercial cylinders using crude pipes and valves. These refilled cylinders are then sold in the grey market to eateries, street vendors, and small establishments that struggle to procure commercial LPG during supply crunches. Many operations function from temporary setups, such as:
- Godowns
- Makeshift sheds
- Hutments
- Slums
Operators frequently shift locations to evade law enforcement, maintaining a fluid and elusive presence.
Increased Profitability and Volatile Pricing
A former LPG delivery worker, identified as Rabi (name changed), now active in the grey market, explained that the business has become far more profitable recently. "Earlier, we sold the gas mainly to auto drivers or small users. But now, LPG from domestic cylinders is being transferred to commercial cylinders because commercial gas is not easily available in the open market," he said.
Rabi noted extreme price volatility in recent days. "A few days ago, we sold a commercial cylinder for around Rs 3,000. Now it sells anywhere between Rs 4,000 and Rs 5,000, depending on demand." He also revealed that the supply of domestic cylinders feeding the illegal trade comes from various sources, including households that sell their cylinders and even those distributed under the Ujjwala scheme, as poor families often cannot afford regular refills.
Risks and Continued Demand from Small Businesses
A roadside food stall owner highlighted the desperation driving this trade: "We cannot run the shop without gas. When official supply becomes uncertain, some people try to arrange cylinders through other channels, though it is risky." Authorities have repeatedly warned that illegal LPG transfer is extremely dangerous, with risks of accidents or explosions. Despite these warnings, the trade persists, fueled by:
- Significant price gaps between official and grey market rates
- Ongoing supply disruptions
- Steady demand from small businesses dependent on LPG for daily operations
This situation underscores the complex challenges in regulating LPG distribution and the need for more accessible and affordable fuel options to curb illegal activities.
