LPG bottlers urge for quota increase due to higher demand
AUG 15 -
Bottlers of liquefied petroleum gas ( LPG ) have asked Nepal Oil Corporation (NOC) to increase the quota of the purchase delivery order as demand has soared. The purchase delivery order is a paperwork NOC issues to bottlers to import LPG from India.
The bottlers, who refill cooking gas cylinders and sell them in the market through their dealers, want NOC to hike the monthly quota from 22,300 tonnes to 31,500 tonnes. The annual demand for LPG has been increasing at the rate of 20 percent.
“Due to growing load-shedding and changing lifestyles of the people, demand for LPG has surged in the last few years,” said Shiva Prasad Ghimire, president of the Nepal Liquefied Petroleum Gas Industry Association (N LPG IA), on Thursday. He added that bottlers had not been able to supply LPG in sufficient amounts as the purchase delivery orders were too small.
The N LPG IA claimed that the current supply was enough to meet only 60 percent of the country’s total requirement. The state-owned oil monopoly had increased the monthly import quota for LPG to 22,300 tonnes three years ago.
NOC issues quotas to bottlers in the amount equal to one-third of their total number of cylinders. There are 55 LPG bottling plants in the country and there are 5.1 million cylinders in circulation. Among them, 490,559 are blue cylinders meant for commercial users and 4.6 million are red cylinders meant for home users.
Ghimire said that the bottling companies were unable to maintain adequate stocks due to short supplies. “Due to the inadequate supply, we are unable to hold stocks even for a single day,” said Ghimire, adding that consumers might have to face an acute shortage any time if something unforeseen were to happen disrupting shipments.
Demand for LPG will rise even more during the festival season and winter. As per the association, demand goes up 25-30 percent during the period. “As a result, there will be severe shortages then,” said the N LPG IA’s General Secretary Kush Prasad Malli.
According to him, they have enough stocks to sell for a week to two weeks per month. “Due to the high demand and low supply, a number of bottling plants have not been able to supply their customers immediately after receiving an order.”
However, NOC said that it would not be possible to increase the quota of the purchase delivery order. “As the corporation has been suffering huge losses on LPG , increasing the quota will add to its financial burden,” said NOC Spokesperson Mukunda Ghimire.
NOC incurs a loss of Rs 587.47 per cylinder of LPG due to its subsidized prices, and its combined losses amount to Rs 290.6 million per month. Ghimire claimed that there had been some shortages only in the Mid-Western and Far Western development regions. “This is because the new bottling plants there have received smaller quotas than companies elsewhere in the country,” said Ghimire.
According to him, NOC has been working to end the shortage in the region by increasing its allocation after reviewing the quotas for other regions.
Source: The Kathmandu Post
