Artificial Crisis Driven by Government Inefficiency
22 Shrawan, Kathmandu. The severe shortage of cooking LPG gas across Kathmandu Valley and the country over the past 22 days is not due to an international market crisis or import blockages, but entirely a ‘man-made’ crisis arising from the government’s and Nepal Oil Corporation’s shortsighted policies, weak management, and loss of market control. The situation where consumers have to stand in line all day at depots and industries carrying empty cylinders is indicative of a serious failure of the government machinery. Previously, as gas shortages increased in the market, the Oil Corporation had arranged for the sale of only half cylinders (7.1 kg) from the end of Magh 2082. At that time, distributing half cylinders somewhat reduced the market scarcity. However, as tensions in the Middle East eased, the Corporation resumed selling full-weight cylinders from 31 Ashar 2083. With the availability of full cylinders, consumer demand suddenly surged in the market, now resulting in long lines from dealers to industries and the general public. The main cause of this artificial shortage is the Corporation’s policy instability and misunderstanding of market psychology. While the Corporation stated in late Magh that half cylinders would be sold for only 15 days to avert the crisis, it continued this distribution for four months. Consumers stored half cylinders at home as they were not allowed to exchange them. Without any scientific evaluation, the Corporation again opened full cylinder distribution. This caused a sudden influx of stored cylinders into the market, creating management problems. This shortsighted decision disrupted market balance, and the common consumer suffered its consequences.
Corporation’s Claim: Increased Quota to 55,000 Tons
Nepal Oil Corporation reported raising the regular gas quota from 49,500 tons to currently between 54,000 and 55,000 tons. According to spokesperson Manoj Thakur, continuous gas supply is coming from India, with about 32,000 tons loaded between the 1st and 18th of this month. With increased imports and ongoing loading even on Sundays, the Corporation is confident the market situation will ease soon. According to the Corporation’s data, between Shrawan 10 and 21, a total of 1,754,154 cylinders (equivalent to 1,311 bullets) were sold in 12 days, averaging approximately 110,000 cylinders daily.
Reasons for Shortage: Panic Buying and Empty Stock
The Nepal LPG Gas Industry Association cited consumer panic buying as the main cause of the shortage. Due to reduced imports from Falgun 2082 to Ashar 2083, old stocks were depleted, and consumers ran out of gas since half-cylinder storage was not feasible. Corporation spokesperson Thakur stated, “Consumers had exhausted their stored gas, and with full-weight cylinders resuming, demand suddenly increased. Panic buying made it difficult for those in immediate need.” He urged prioritizing household usage, explaining that the government is monitoring hotels and industries, but sellers themselves should give priority to household consumers. Thakur emphasized that sellers and dealers must manage gas distribution by recognizing their customers.
According to the Corporation, Nepal’s monthly gas consumption is about 3.1–3.2 million cylinders, with a daily demand of 108,000 cylinders.
Industry Association’s View: Supply Normalization to Take 15–20 Days, Cylinder Carriers in Short Supply
The Nepal LPG Gas Industry Association indicated that it will take another 15–20 days for the shortage to ease. They reported that shifting from half to full cylinders increased shortage in the market. Association President Diwan Chand noted that despite increased imports, the number of gas carriers (bullets) is limited, restricting how much gas can be brought in. He stated that the officially registered cylinders in the market number about 17.5 million, up from 15.5 million two years ago. The association rejected allegations that gas is exclusively supplied to hotels and businesses during shortages. It provides daily reports to the Corporation and stated that the government is conducting oversight. The association is optimistic that the shortage is gradually reducing and expects full resolution within 20 days.
The government’s Industry, Commerce and Supplies Ministry has been issuing daily bulletins to regulate black marketing and artificial shortages, listen to consumer complaints, and facilitate market management. Monitoring teams and hotline numbers are publicly available. However, consumers complain of unreachable contacts and unaddressed grievances. The state’s distribution system appears harsh for ordinary consumers but generous toward major traders. Despite the crisis and inability of ordinary citizens to obtain even one cylinder, large hotels and restaurants reportedly face no gas shortage. Consumer rights activists accuse industrialists and dealers of directly delivering gas to hotels for substantial profits. They also claim that during emergencies, the government failed to cut gas supply to businesses to prioritize household needs. The government is criticized for hiding its incompetence by showing import numbers. Despite claims of importing over 32,000 tons of gas in Shrawan alone, officials have not explained where or how the gas was distributed. The panic despite adequate gas availability signals leakages within the system. Even under such circumstances, the government blames consumers, confirming its lack of presence and failure in supply system management.