MoCS for removing all taxes on LPG

KATHMANDU, MAY 04 -

The Ministry of Commerce and Supplies (MoCS) has said that the government should waive all taxes on liquefied petroleum gas (LPG) used for household purposes.

The ministry urged that LPG be made tax-free as it is the common cooking fuel in urban areas and is not taxed in member countries of the South Asian Association of Regional Cooperation (Saarc). The government charges a tax of Rs 241.84 on a cylinder of LPG. “The government should be serious about removing taxes on LPG which has become a basic necessity of every household,” said Commerce Minister Lekh Raj Bhatta while presenting the ministry’s review of the second four-month period on Thursday.  

Bhatta added that the Finance Ministry’s policy of imposing an additional 7 percent import duty on petroleum products had added to the price burden for consumers. “This error needs to be corrected by the Finance Ministry at the earliest,” said Bhatta.

Meanwhile, Bhatta said that the MoCS was planning to introduce LPG cylinders weighing 19 kg. They will be allowed for commercial use only. According to an MoCS source, the cylinders are likely to be introduced after three months.

During the review meeting, Bhatta said that Nepal Oil Corporation (NOC) was selling all petroleum commodities except LPG and diesel at market prices.

NOC plans to sell LPG at the market price after it finishes distributing LPG consumer cards. A household consisting of four members will get one cylinder monthly at a subsidized rate while additional cylinders will be charged at the market price. “Sooner or later, NOC will sell diesel at the market price,” Bhatta said.

As the country still does not have a law to govern petroleum transactions, the MoCS has prepared a Petroleum Transaction Act 2012 and plans to table it at the next Cabinet meeting. Last year, Nepal’s transactions in petroleum products amounted to more than Rs 80 billion and they are expected to touch Rs 100 billion this year.

Meanwhile, the government has issued a bottling license to Chandi Lumbini Gas. Chandi has received a permit to store 3,000 tonnes of LPG monthly. The MoCS said that licenses would be issued to new bottling companies under the free market trade policy. NOC has been widely criticized by consumer rights activists for issuing licenses to LPG bottling plants haphazardly. Currently, there are 42 gas bottling plants operating across the country. MoCS officials said that the free market trade policy does not allow preventing new entrants.

Source: Kantipur