Number of LPG bottling plants reaches 51

KATHMANDU, JAN 30 -

With the Nepal Oil Corporation (NOC) issuing purchase delivery orders (PDOs) to three new LPG bottling plants, the number of such facilities in the country has reached 51.

The state-owned NOC has issued PDOs to Gita Gas, Nameste Gas and Kapsons Gas — all based in Dhading — to import 108 tonnes of LPG gas each in the initial phase. “They have been issued the PDOs after making sure that they meet all the requirements,” said Shiva Prasad Pudasaini, spokesperson for NOC.

The new companies will start distributing LPG cylinder s from February.

A new bottler, after registering its company at the Office of Company Registrar, is required to pay Rs 50,000 as application fee to NOC for acquiring the PDO.

Although old LPG bottlers have been complaining that the government has been allowing the entry of excessive LPG bottlers, NOC sources said they cannot bar the entry of new companies under the market economy.

The LPG business is considered one of the most profitable businesses as even if NOC is under pressure due to massive debt load, the bottlers keep enjoying profit.

The government decides everything for the LPG business, even the profit. “As old players fear losing market share, they have been opposing the entry of new company,” an NOC source said. 

However, NOC has made mandatory for a new company to come with blue-colour cylinders in the first instalment.

The government, for the last one and half years, has been struggling to introduce colour-coded cylinders to regulate LPG distribution. As the government has been providing subsidy of Rs 604 on a LPG cylinder for all users, it plans to cut the hefty subsidy to make NOC able to sustain its business by introducing the colour-coded cylinder system.NOC officials said ending the subsidy on LPG will allow NOC to offset the massive loss it has been incurring. At present, monthly loss for NOC on LPG sales stands at Rs 724 million, which is based on the assumed monthly sale of 1.2 million cylinders.

Meanwhile, Pudasaini said the market will not see the shortage of LPG amid traders’ claim of a possible shortage from February. “Although the demand grows during winter, NOC has been supplying enough products to meet the demand.”

He said the import of LPG in September last year was relatively low at 13,000 tonnes, and normalised at 18,000 tonnes in December. As of January 28, NOC has issued PDOs for 16,000 tonnes LPG.

The total January consignment will be 17,000 tonnes, Pudasaini said. The average demand during winter exceeds 18,000 tonnes due to extended loadshedding hours.

Cabinet panel okays guideline

The Cabinet Committee on Economic and Infrastructure has approved the guideline for colour-coded LPG cylinder s proposed by the Ministry of Commerce and Supplies. The guideline will be tabled in the next Cabinet meeting for endorsement, according to government officials. Meanwhile, the government has planned to issue code-of-conduct for the implantation of the colour-coded cylinder system. (PR)

Source: The Kathmandu Post