LPG bottlers, dealers for enforcing dual pricing only after Tihar

KATHMANDU, Aug 13:

At a time when the government is doing groundwork to enforce dual pricing in liquefied petroleum gas (LPG), bottlers and dealers of LPG have suggested to the government to introduce such system only after Dashain and Tihar festivals.

Issuing a statement on Wednesday, Nepal LP Gas Industry Association - the association of LPG bottlers, said the government´s first priority should be on ensuring smooth supply of the popular cooking fuel during the festive season. Last week, Nepal Gas Dealers Association had suggested to the government to not enforce dual pricing before putting in place a strong mechanism for market monitoring.

“Nepal Oil Corporation (NOC) has not increased LPG quota for bottlers over the past three years,” Kush Prasad Malli, general secretary of Nepal LP Gas Industry Association, told Republica. “During the period, number of cylinders has increased by one million units.”

There are 54 LPG bottlers across the country. They have circulated altogether 5.5 million cylinders in the market.

NOC distributes 19,000 tons of LPG to different bottlers every month. However, bottlers say monthly demand hovers over 26,000 tons.

According to bottlers, demand for LPG hits peak during the Dashain-Tihar festive season. They also say enforcement of dual pricing might create shortage of LPG during the festive season.

NOC officials say monthly demand for LPG stands at 1.5 million cylinders (14.2 kg each) which is equal to 23,566 tons. “But Indian Oil Corporation (IOC) is not providing sufficient LPG, citing short supply in India itself,” an NOC official told Republica.

But bottlers and dealers say NOC is cutting LPG imports as it is facing huge loss in its trade. “More import means more loss for them,” Malli said.

NOC is facing loss of Rs 587.47 per cylinder, according to recent price update posted on its website.

The government is preparing to introduce dual pricing before Dashain festival to cut subsidy for commercial use of the popular cooking fuel, according to Deepak Subedi, spokesperson of the Ministry of Commerce and Supplies (MoCS).

According to the guidelines prepared for the enforcement of dual pricing, 30 percent of LPG imported in the country is being consumed by commercial users like hotels, restaurants, and industries, among others.

Meanwhile, entrepreneurs involved in LPG business have expressed reservation over the guidelines, saying that they were not consulted while preparing the guidelines.

Source: Republica