Gas bottlers unwilling to import LPG from OdishaParadeep, a petroleum refinery located in the Indian state of Odisha, has been cleared to export liquefied petroleum gas (LPG) to Nepali bottlers, but they are reluctant to procure its products because of the high transport costs.
Paradeep, a petroleum refinery located in the Indian state of Odisha, has been cleared to export liquefied petroleum gas (LPG) to Nepali bottlers, but they are reluctant to procure its products because of the high transport costs.
Nepal Oil Corporation (NOC) began offering import quotas four months ago, but there have been no takers because it has backtracked on its promise to refund shipping charges, gas bottlers said.
Nepal currently imports cooking gas from four refineries of Indian Oil Corporation (IOC) located in Haldiya, Barauni, Karnal and Mathura in India. Following last year’s Indian trade embargo lasting four and a half months, IOC has been asking NOC to import LPG from other suppliers.
NOC records show that it issued permits to import around 5,000 tonnes of LPG per month to gas companies in the last four months.
This month, the state-owned oil monopoly has allocated 5,148 tonnes of cooking fuel for import from Paradeep. However, no gas bottler has not taken purchase delivery orders from NOC so far.
As per the system, NOC issues purchase delivery orders to gas bottlers based on which they can import LPG from IOC’s refineries. NOC reimburses bottlers for the transport of the shipment.
Shiva Ghimire, president of the Nepal LP Gas Bottlers Association, said they were unable to import LPG from Paradeep as the refund offered by NOC was insufficient compared to their actual transport cost. “The refund offered by NOC is Rs11 less per cylinder than the actual cost,” he said.
As per NOC, it has offered to pay Rs19,000 per bullet while transporting LPG from the new importing point. Ghimire said they would suffer a loss of Rs8,000 to Rs12,000 per bullet in transport costs.
Paradeep’s refinery is located at a distance of 3,200 km which means higher shipping costs, said bottlers. However, the LPG produced at the refinery is reported to be cheaper compared to the products of other Indian refineries. “Paradeep’s LPG is cheaper by Rs10 per tonne,” said Ghimire.
NOC officials have blamed gas bottlers for not showing interest in importing LPG from Paradeep because demand has slowed of late.
“If gas bottlers are ready to import from Paradeep, NOC is ready to refund the entire transport cost,” said a senior NOC official. Currently, the state enterprise has been allocating 30,000 tonnes of cooking gas while gas bottlers have been importing
only 22,000 tonnes due to the slowdown in demand.