Nepal Oil Corporation (NOC) has been mulling over issuing permits to new gas bottling plants by amending the Dealers Bylaw 2009, said company officials. 

The management has removed the provision forbidding it from issuing new operating permits from the regulation and sent it to the board for its approval, attracting criticism that Managing Director Gopal Bahadur Khadka had been trying to validate the licences issued earlier and provide new ones to his near and dear ones.

In the last three years, state-owned oil monopoly NOC has issued permits to a dozen new bottlers of liquefied petroleum gas (LPG) in violation of the Dealers Bylaw. 

Khadka denied that the amended regulation had been sent to the NOC board. “We are in the process of amending the bylaw,” said Khadka, adding that they would be revising safety measures, capital requirements and size of the factory area for new applicants.

Meanwhile, an NOC board meeting held on Monday discussed whether or not to allow the entry of new gas bottling plants. “The meeting has decided to obtain inputs from the existing gas bottlers before amending the bylaw,” said a board member.  

During the last three years, 34 gas companies were reported to have been registered with the Office of the Company Registrar. 

Records of the Department of Industry show that four new cooking gas plants were registered in the first one and a half months of this fiscal year. They are Buddha Industries, Nobel Gas Udhyog, Pathibhara Gas Udhyog and Birata Gas Udhyog. These companies have a combined investment of Rs625.6 million. 

According to an NOC source, the intention behind amending the bylaw is to benefit these four gas bottlers in particular. Four years ago, the then commerce and supply minister had scrapped the licences issued to 37 gas bottlers saying that there was no need for so many factories.

Currently, there are 53 gas bottling plants operating in the country. According to the Nepal LP Gas Industry Association, most of them are operating below capacity. 

“Many gas bottlers are operating at 60 percent of capacity,” said Shiva Ghimire, president of the association. He urged the authorities to issue new licences only after carrying out a market survey. “Instead of issuing new permits, NOC should focus on managing the existing gas companies.” 

New gas plants can register with the Department of Industry, but they need to obtain a licence to operate from NOC after satisfying its infrastructure and safety criteria.