NOC plans to import LPG from Paradip on regular basis
Kathmandu, July 13
Transportation cost of liquefied petroleum gas (LPG) will go up in the coming days as Nepal Oil Corporation (NOC) is preparing to import cooking gas on a regular basis from Paradip refinery of Indian Oil Corporation (IOC), located in Odisha state.
The state-owned petroleum company has recently asked LPG bottling plants to make product delivery order (PDO) to import LPG from Paradip on a regular basis as the IOC has said that supply from Barauni refinery to Nepal will be cut in the future citing rising demand in their own locality.
IOC’s Barauni refinery is the nearest refinery from Nepal. The distance to Barauni refinery from Birgunj border is around 254 km, whereas Paradip is 1,040 km far from Birgunj.
“Though LPG is quite cheaper in Paradip than in Barauni, it will not cover all the cost incurred in transportation,” said Kush Prasad Mally, vice president of Nepal LP Gas Industry Association (NLPGIA).
Bottling plants need to lease more bullets to transport cooking fuel from Paradip.
“Due to the long distance, a bullet can transport LPG only two times in a month from Paradip as compared to at least three times from Barauni,” as per Mally.
The Barauni refinery caters to 50 per cent of country’s LPG demand at present, with remaining amount being imported from Haldia and Mathura. Nepal is entirely reliant on India for fuel import.
Initially, NOC will issue product delivery order of 10,000 tonnes for mid-July to mid-August, which IOC has pledged as additional supply for Nepal to make up for the shortfall caused during the disruptions in supply lines from India that has caused a prolonged crisis.
The country has been facing perennial shortage of cooking gas during winter season when supply from Barauni is cut as demand of LPG surges in India.
The additional quantity from India is expected to end erratic distribution of cooking fuel when consumers have been compelled to keep their cylinders in queue to get LPG. Demand for cooking gas always increases during festive season and peaks during winter. Demand for LPG peaks to around 30,000 tonnes per month during the winter season from 25,000 tonnes at normal times.
“To end perennial problem of LPG shortage during winter season, we have looked at Paradip as an alternate supply point,” said Mukunda Ghimire, spokesperson for NOC.
As per NOC, IOC refineries, which are currently allowed to dispatch load to Nepal, are unable to increase monthly supply to above 30,000 tonnes. In this situation, Paradip could be a major supply point for Nepal in the future as the demand of cooking gas has been surging by 13 per cent every year.
Paradip is one of IOC’s largest refineries, which can supply sufficient quantity to Nepal.