Dual pricing system on LPG by Jan-end

Dual pricing system on LPG by Jan-end

After repeated failures to enforce dual pricing system on liquefied petroleum gas ( LPG ), state-owned Nepal Oil Corporation (NOC) has set yet another deadline.

The oil monopoly said the dual pricing system—subsidised and non-subsidised—would be implemented by the end of January. NOC is currently preparing to get endorsed the working guideline from its board soon.

After the system is implemented—commercial users who will be entitled to buy blue-colour cylinders—will have to pay the market price, while households users—who have to buy red cylinder—will get LPG at subsidised rates.

The government enforced the dual pricing system in February 2013, but was forced to rollback the decision after 11 student unions intensified protests, citing the lack of homework.

Subsequently in June 2013, the government officially launched colour-coded LPG cylinders in the market with a view to end subsidy given to commercial users and to enable the Nepal Oil Corporation (NOC) to offset its losses in the LPG business. But it has not been able to implement the system. Presently, an LPG cylinder costs Rs 1,470 and NOC has been subsidising Rs 290.76 for all users. On top of the subsidy, entrepreneurs also receive VAT refunds.

Minister of Commerce and Supplies Sunil Bahadur Thapa said the government would implement dual pricing soon after necessary laws are endorsed. “We have asked the NOC to go thoroughly through the guideline to avoid any possible obstacles that could arise during the implementing phase,” he said.

NOC said it has expedited work to prepare the final draft of the working guideline after the Cabinet endorsed the LPG Supply and Distribution Orders three weeks ago. The orders were published in the Nepal Gazette few days ago.

According to NOC, around 5.2 million LPG cylinders are consumed in the market, and it plans to circulate 30 percent blue-colour cylinders in the market. According to sources, the guideline allows NOC to take Rs 100 profit from a blue cylinder.

Thapa vows to smoothen supply

Minister for Commerce and Supplies Sunil Bahadur Thapa said cooking gas supply will be eased in the next 3-4 days as the government has increased the import quota. He said Nepal Oil Corporation (NOC) has been importing an additional 20-25 bullets of the LPG daily after shortage crippled the country. Meanwhile, lawmakers have criticised the government for its failure to respond to the ongoing shortage of petroleum products. At a Parliamentary Industry, Commerce and Consumer Welfare Committee meeting, they said the government has not been able to control black-marketing of cooking gas.

Source: eKantipur