Fuel Crisis in Nepal: Demand to Sell Full Gas Cylinders, Nepal Oil Corporation’s Response
Photo source, EPA
Highlighting supply chain difficulties caused by the crisis in the Middle East, Nepal Oil Corporation continues the policy of selling only half gas cylinders. However, the head of the umbrella organization of gas entrepreneurs demands permission to sell full cylinders.
Gas industries across the country report that cylinders weighing 14.2 kilograms are ready for market distribution. They state that all cylinders, including those used for storage at industrial sites, are fully filled, and the rule allowing sale of only half cylinders has hindered gas sales.
Following attacks by the US and Israel on Iran and Tehran’s closure of the Strait of Hormuz, supply issues have emerged. Since late February, the government implemented the half-cylinder sales policy.
The executive director of Nepal Oil Corporation stated that Indian Oil Corporation has reduced gas supply by up to 15 percent of Nepal’s requested volume.
A corporation spokesperson said that decisions regarding the entrepreneurs’ demands will be made only after thorough review.
What Businessmen Are Saying
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Diwan Bahadur Chand, president of the Nepal LPG Gas Industry Association, said they have submitted a written request to the government to allow sales of 14.2 kg cylinders.
He said, “All of our cylinders are fully filled. Even those used for storage in industry are completely filled. Due to inability to empty cylinders, the circulation of cylinders for refilling has decreased, which we have specified in our letter.”
Chand mentioned that Nepal Oil Corporation has not yet made any decision on the issue. On Sunday, they gathered information and learned that there has been a 30 percent reduction in gas supply from the Mathura refinery in India.
“We continue to demand full permission to sell 14.2 kg cylinders. We are ready to revert if necessary. Currently, we are unable to sell even the gas we have, and vehicles are stuck in queues.”
They have also issued an ultimatum warning that if the government fails to meet the demand by Friday, action may be taken against those responsible. They emphasize that even refilling gas in Indian cylinders has not been possible.
Chand added, “If the decision is not made, we have already informed the Oil Corporation that we will switch to 14.2 kg cylinders or stop gas sales altogether.”
For April, the Nepal Oil Corporation allocated a quota of 51,282 metric tons of gas imports from India to 60 gas industries in Nepal. Gas cylinders arrive from Baruni in Bihar, Mathura in Uttar Pradesh, Paradip in Odisha, and Haldia and Durgapur in West Bengal.
Manoj Kumar Thakur, spokesperson for Nepal Oil Corporation, said the issue of full-cylinder distribution is under review.
He said, “This matter is under discussion. We are carefully considering market conditions. The evaluation of whether the crisis may reoccur or if supply disruptions are likely will guide the decision.”
Quota Allocations from Each Refinery
Officials from the corporation report that Nepal’s monthly gas consumption ranges between 45,000 and 46,000 metric tons.
Although the corporation lacks LPG storage facilities, about 10,000 metric tons of storage capacity and stocks are available at 60 industries nationwide.
Photo source, Reuters
For April, Nepal Oil Corporation has allocated quotas to import approximately 11,000 metric tons from Baruni, 2,500 metric tons from Haldia, 9,000 metric tons from Durgapur, 16,000 metric tons from Paradip, and 12,800 metric tons from Mathura.
Last week, the Mathura refinery informed Nepal Oil Corporation it could supply 9,200 metric tons of gas in 511 cylinders.
Chandika Bhatt, Executive Director of Nepal Oil Corporation, said that despite a 10 to 15 percent cut in gas supplies, the distribution system has been made efficient.
He added, “We are implementing meticulous management of gas distribution. Where gas is unavailable, we notify immediately and distribute gas based on priority, actively working to avoid any severe market shortages.”
How Much Does Nepal Spend on Cooking Gas?
Photo source, Nepal Photo Library
Last week, Nepal Oil Corporation raised the price of 14.2 kg LPG cylinders by NPR 100 to NPR 2,010. The corporation reports experiencing a loss of more than NPR 416 per cylinder.
According to statistics published by the supply minister, LPG accounts for around 3.5 percent of Nepal’s total imports.
From mid-July to mid-February, Nepal purchased over 372,000 metric tons of LPG from Indian Oil Corporation, with customs data showing imports valued at more than NPR 3.731 billion.
In the previous fiscal year, Nepal imported over 554,000 metric tons of LPG from India and 6.7 metric tons from China, paying NPR 6.258 billion for Indian imports and approximately NPR 1.08 million for Chinese LPG.
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