Distribution of LPG uneven in January
KATHMANDU, Feb 4:
The quota distribution to LP gas bottlers for an additional 4,000 metric tons of gas for January is found to have been unscientific and aggravated the LP gas shortage in the market instead of bringing the situation back to normal.
The purchase delivery order (PDO) for the 4,000 metric tons of LP gas issued to bottlers by Nepal Oil Corporation (NOC) in January was uneven and unscientific, which further intensified the LP gas shortage.
Data provided by NOC itself showed that it issued PDO to bottlers for the 4,000 metric tons in an unscientific manner--low PDO to bottlers which have a larger market share and high PDO to those with a low market share.
After failing to alleviate the acute shortage of LP gas in the market, NOC on January 20 increased the gas quota for the month by 4,000 metric tons to 29,000 metric tons.
For example, NOC issued PDO for 36 metric tons each to Koshi Gas and Nepal Gas, which have each a 8.34 percent market share. On the other hand, the corporation issued PDO for 108 metric tons to Everest Gas and Lumbini Gas whose market shares are 2.76 percent and 2.14 percent respectively. Similarly, Shree Gas, Ugrachandi Gas and Surya Gas, among others, were issued PDO for 108 metric tons despite having only nominal market shares.
As a result of this discrepancy, the shortage of LP gas only got worse. The LP gas crisis was origionally created by bottlers and dealers pushing the sale of new LP gas cylinders instead of refilling the old ones.
Meanwhile, NOC officials also admitted that the PDO issued in January was unscientific, and vowed to rectify the mistake in February. “We too realized that the quota distribution to bottlers in January was uneven. We will rectify the mistake and issue PDO to bottlers on the basis of their market share and the available number of cylinders in the market,” Mukunda Ghimire, spokesperson of NOC, told Republica.
According to a source at NOC, the Ministry of Commerce and Supplies (MoCS) in mid-January sent a letter to NOC to increase the LP gas quota by 4,000 metric tons and issue PDO to bottlers in coordination with the Nepal LP Gas Industry Association. “The board, instead of coordinating with the association and issuing PDO on its own, approved the draft of the PDO that the association sent to NOC,” said the source.
Meanwhile, Ghimire said that NOC will issue PDO for 29,000 metric tons of LP gas for February and the quota distribution system will be fair this time.
According to the bottlers, uneven distribution of quota encourages small bottlers to engage in black marketeering in cylinders and causes scarcity in the market. “If a smaller bottler is given a bigger quota than the number of cylinders it has, it will certainly go for new cylinders or will use the cylinders of some other brands,” said Rajendra Dallakoti, proprietor of Baba Gas, which has a 5.65 percent market share.
He urged NOC to issue PDO to bottlers only after getting an assurance from Indian Oil Corporation (IOC) about the volume of LP gas that it supplies in a month.
Though NOC had issued PDO to bottlers to purchase 29,000 metric tons of LP gas for January, IOC supplied only 26,000 metric tons for the month.
Source: Republica
