NOC to bear the increased cost burden

Entrepreneurs of cooking gas, also known as liquefied petroleum gas (LPG), have called off their protest after the government agreed to hike their overhead expenses. Amid widespread criticism over the disruption in the supply of the daily essential, the decision has brought respite to the consumers in Nepal who are heavily reliant on cooking gas.

Following a four-hour long discussion with the government on Tuesday, the LPG bottlers consented to the government raising compensation on their overhead expense by Rs 12.75 per cylinder. The Nepal LP Gas Association (NLPGA) signed a 5-point agreement with the government, which includes maintaining smooth distribution of the essential.

The agreement to withdraw the protest was reached following the talk between representatives of the NLPGA and a government team led by Govinda Bahadur Karki, the secretary at the Ministry of Industry, Commerce and Supplies.

The LPG industrialists had been protesting for the past three weeks, pressurizing the government to fulfill their demands. They had been creating artificial shortages of cooking gas on the pretext that the government did not fulfill their demands, making the consumers suffer due to their misconduct.

In the run-up to the talks on Tuesday, the LPG bottlers had stopped collecting purchase delivery orders issued by Nepal Oil Corporation (NOC) since Sunday. The industrialists had been demanding a commission of Rs 50 per cylinder from the NOC.

The LPG entrepreneurs even refused to abide by the recommendation of a study report prepared by experts from Tribhuvan University and Kathmandu University suggesting the government to increase the entrepreneurs’ commission by only Rs 12 per cylinder.

Chandika Prasad Bhatta, managing director of the NOC, said the increased financial burden will be borne by the corporation itself. According to him, the NOC will now have to face a loss of Rs 342.75 per cylinder with the increased overhead cost of commission to LPG entrepreneurs.

The discussion on Tuesday also concluded to mandate the NOC to conduct the necessary groundwork to study on other demands forwarded by the LPG bottlers, which includes revising the commission rate for the LPG industries and gas depots. Meanwhile, all the bottlers have consented to obtain PDOs from the NOC on a regular basis to facilitate the supply of the cooking gas.

The LPG bottling plants have been circulating three million cylinders a month to sell their products. A total of 12,000 gas depots have been selling cooking gas across the country. Of the total imports, around 40 percent is consumed inside the Kathmandu Valley.