Kathmandu, November 28:

With an aim to maintain adequate supply of LPG, talks between the Nepal Oil Corporation (NOC) and LP Gas Association are in progress, Sawarmal Aggrawal, president of the association, said.

The association has been agitating after the NOC increased prices of petroleum on October 24, with a 10-point charter of demands, claiming that the NOC failed to review the costs of cooking gas suppliers (except for transport costs) for many years.

A seven-member committee was then formed to discuss the association’s demands and to come up with recommendations within a month. One of the main demands of the association was that the NOC should pay the extra transport costs of LP companies for bringing gas from Mathura and Haldiya.

LP businessmen said the original agreement between them and the NOC only mentioned that transport costs of gas brought in from the Barauni refinery will be covered. They said since the NOC asked them to bring gas from Mathura and Haldiya, their transport costs had risen.

Aggrawal said the NOC was positive on this issue and it was getting the Indian Oil Corporation’s help to determine the distances of Mathura and Haldiya from Kathmandu.

He said the NOC was also positive about the association’s demand that insurance cost

be integrated in the purchase price of LP gas at one per cent. This facility has been provided to other petroleum dealers. After the NOC raised the price of LP gas from Rs 701 to Rs 901 for gas companies, the companies said that the risk of importing gas will be too high and they could not bear it.

Aggrawal also said the association was flexible about its demand that gas companies should get five per cent profit in their business. The committee is about to come up with its recommendations within the next few days.

Meanwhile, 12 new gas companies are coming in the market, though there is a chronic shortage of gas, Aggrawal said, adding the demand for gas rises with the rise in population. Currently, there are 22 gas companies in Nepal.