MoS to implement dual pricing in LPG in near future

Kathmandu, October 2

The Ministry of Supplies (MoS) has started to lay the groundwork for implementation of dual pricing system in liquefied petroleum gas (LPG) as soon as possible.

Though the government had envisioned implementing such system in LPG in 2013 to facilitate household users, it has been unable to do so till date.

Under the dual pricing system in LPG, the government had earlier planned to introduce two colours of LPG cylinders in the market — red and blue — and sell red cylinders meant for household use at subsidised rates. As per the plan, bottlers could sell the blue cylinders only to commercial users like hotels and restaurants and such users would be charged the normal rate of LPG.

However, the implementing agency, Nepal Oil Corporation (NOC), has been unable to enforce the dual pricing in LPG since almost five years due to lack of enough homework.

“Dual pricing system in LPG is a consumer-centric plan of the government which was delayed for many years due to various reasons. However, MoS will now give high priority to implementing the system in LPG,” said Minister for Supplies Shiva Kumar Mandal.

Informing that a separate committee will soon be formed to make necessary arrangements to implement the dual pricing system in cooking gas, Minister Mandal assured that the system will be enforced as soon as possible.

Following government’s direction, gas bottlers had even introduced the dual colour-coded cylinders in the market in June 2013. However, the government was forced to rollback its decision after student unions affiliated with different political parties intensified protest activities citing lack of enough groundwork from the government. They alleged the system was being introduced without any legal guidelines.

Similarly, a sub-committee under Industry, Commerce and Consumer Welfare Committee of Legislature-Parliament had prepared a report in August 2015 stating that the government needed to accomplish plenty of groundwork like classification of gas dealers, identification of the demand of LPG for household use and commercial use and develop a legal mechanism to monitor the distribution of subsidised LPG cylinders, among other factors, before enforcing the dual pricing system in LPG.

NOC had earlier been subsidising almost Rs 800 in a cylinder of LPG to consumers when its cost price was around Rs 2,200 per cylinder. However, NOC is currently not providing any subsidy in LPG following a sharp drop in gas price in the last few years.

Currently, a LPG cylinder costs Rs 1,325 in the domestic market.