Nepal | July 11, 2020

NOC plans to import additional 10,000 tonnes of LPG in July

Himalayan News Service
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Nepal Oil Corporation (NOC)

Nepal Oil Corporation. Photo: THT file

Kathmandu, June 26

The country will import an additional 10,000 tonnes of liquefied petroleum gas (LPG) in July as Indian Oil Corporation (IOC) has pledged to conclude all the procedural stipulations within this week to provide the additional quantity from Paradeep refinery of Odisha state.

IOC has promised additional supply to Nepal to make up for the shortfall caused during the disruptions in supply lines from India that has caused a prolonged crisis. The country is entirely reliant on the southern neighbour for fuel import.

Nepal Oil Corporation (NOC) has said that additional quantity will be imported through regular process by LPG bottlers. Mukunda Prasad Ghimire, spokesman of NOC, informed that product delivery order (PDO) to gas bottlers will be issued from this week after it receives a letter to that effect from IOC. “Most probably we will able to send gas bullets to receive load from Paradeep from next week,” said Ghimire.

The additional quantity from India is expected to end the erratic distribution of the cooking fuel because consumers are still compelled to keep their cylinders in queue to get LPG. Demand for cooking gas always increases during the festive season and peaks during winter season, as per Ghimire.

“That is why NOC needs to increase the supply in the domestic market before the onset of the festive season.”

However, LPG bottlers have been reluctant to import cooking gas from Paradeep, which is 1,039 km from Birgunj. They have sought compensation from NOC because transport fare would rise while importing LPG from Paradeep. They claim that the existing price of cooking gas will not cover the cost incurred while importing the commodity from Paradeep. “NOC should either compensate gas bottlers or increase the market price of cooking gas slightly for a certain period,” said Shiva Prasad Ghimire, president of Nepal LP Gas Industry Association (NLPGIA). “Without any concrete decision from NOC, we will refuse to accept the PDO.”

Currently, bottlers have been importing cooking gas from Barauni, Haldia and Mathura. Ghimire, who heads the
NLPGIA, said a bullet can transport LPG only two times in a month from Paradeep. “We will need to lease more bullets to transport cooking fuel from Paradeep,” he said.

NOC Spokesman Ghimire has said that NLPGIA’s claim is false because the price of LPG is slightly lower in Paradeep than the price of LPG that bottlers have been receiving from Haldia. “The difference in the price of cooking gas in Paradeep and Haldia will cover the transportation cost,” according to him. The distance to Paradeep from Birgunj is 200 km more than to Haldia.

NOC has said that it has not yet spoken to bottlers regarding importing cooking gas from Paradeep because IOC has yet to clear some procedures including route permit, among others. “Once we receive a letter from IOC to dispatch our gas bullets, we will invite bottlers and hold discussions on it,” said Ghimire.

Currently, the country consumes around 27,000 tonnes of cooking gas every month but it goes up to 30,000 tonnes during the festive season and in winter. As per NOC, IOC’s refineries, which are allowed to dispatch load to Nepal are not able to increase supply of above 30,000 tonnes in a month. “We have to talk to IOC for regular supply from other refineries as well because demand of cooking gas has been surging by 13 per cent every year,” according to NOC.

A version of this article appears in print on June 27, 2016 of The Himalayan Times.

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