LPG shortage to get more acute in coming months
Kathmandu, November 27:
Nepali consumers will feel the pinch of LPG shortage even more in the coming months as the demand for it goes up by nearly 25 per cent during the winter season, according to Gyaneshwor Aryal, the president of the Central Gas Dealers’ Association of Nepal.
This is more so because the Nepal Oil Corporation (NOC) has currently been importing only about 20 per cent of the demand for LPG, which is in short supply ever since 2005.
Though the NOC agreed in February 2005 to import 7,500 metric tonnes of
LPG every month, it never met the target due to recurring loses partly due to the subsidy in LPG. The NOC agreed again in July 2007 to increase the import to about 8,500 metric tonnes a month, the import is much below the target, insiders in the LPG trade said.
Though the NOC increased petroleum prices on October 24 this year to smoothen the supply by reducing the losses attributed to subsidy, it said it had still been providing
Rs 70 subsidy per cylinder on LPG. In a recent statement, the corporation said its losses in gas have climbed to Rs 148 per cylinder following a rise in the prices of crude petroleum products in the international market.
Besides, there are additional problems in the supply chain of gas, which reaches the consumers through three levels namely: the bottling companies, the distributors and the dealers. They have been facing different problems at their own levels.
Gas dealers, who sell gas to the consumers, say bottling companies and distributors are supplying more gas to the Terai region for more profit. This is because that the gas price is same all over the country, they can save transport costs by supplying more to the Terai region and increase their profit.
“To change this situation, the NOC must let dealers to sell LPG at a relatively lower price in the Terai region, so that more gas will come to Kathmandu,” Aryal said.
Gas distributors also have their own problems. On October 28, they had submitted a 10-point demand to the NOC demanding a change in their contract papers. Their main complaint is that their costs (except for transportation) have not been reviewed for the last seven years. A committee has been formed to look into the matter and it is expected to come up with its recommendations very soon.
Distributors have admitted big hotels are not affected by the shortage as they have signed contracts with the distributors to ensure smooth supply. This is also one of the reasons behind the shortage of gas for commoners.
Though the Nepal Oil Corporation is reportedly mulling a duel price system for business houses and commoners, it has not come up with any concrete decision in this regard so far.