NOC cuts price of LPG by Rs 50 per cylinder

  • Price of other petroleum products to remain same

Kathmandu, September 1

Nepal Oil Corporation has slashed the price of cooking gas by Rs 50 per cylinder as a festival offer for consumers to be effective from Friday. Consumers can refill each LPG cylinder at Rs 1,325 and the offer will last till November 6.

The state-owned petroleum company had already made an announcement to cut the price of LPG, popularly known as cooking gas, during the festive season — Dashain, Tihar and Chhat — from September 17. But after the announcement, gas dealers stopped receiving cooking gas cylinders from the gas bottlers as the dealers would have to face a loss of Rs 50 on each cylinder if they bought them now and sold the cylinders after September 17.

On the other hand, bottling plants were also reluctant to obtain product delivery order (PDO) citing that refilled cylinders had piled up in warehouses of bottling plants as gas dealers had stopped ferrying cylinders from the bottling plants to their stores.

As per NOC officials, the company has revised the price to be effective from tomorrow because import of cooking gas might fall as bottlers had stopped taking PDO to import cooking gas blaming gas dealers for not clearing the refilled cylinders from the warehouses of bottling plants.

“Fall in import might cause another havoc towards the beginning of the festive season, which is why we have decided to implement the festive price from tomorrow,” said Deepak Baral, director of NOC.

“If the price at which NOC purchases LPG does not rise significantly, we might not revise the price of cooking gas in the longer term.” Even after cutting the price by Rs 50 per cylinder, NOC will still generate a profit of Rs 61.70 on the sale of every cooking gas cylinder. In addition to this, NOC collects Rs 69.33 on every cylinder as infrastructure development tariff to build its infrastructure. This means that even after revising the price, NOC will still generate profit worth Rs 131.03 on sales of every LPG cylinder.

Meanwhile, NOC has decided not to revise the price of other petroleum products before festive season starts. As per Baral, NOC would have to slightly increase price of petroleum products as per the price list received by NOC on September 1 from Indian Oil Corporation. “However, since the major festivals are around the corner, we decided not to increase the price of other petroleum products,” he informed.

NOC receives new price list as per the international market rates on the first and 16th day of every month of the English calendar from Indian Oil Corporation. NOC introduced automatic pricing mechanism to make adjustments to the prices of diesel and petrol based on the international market rates on September 29, 2014, but the mechanism has not been implemented effectively.