Gas bottlers threaten to disrupt supply over commission disputeGas bottlers are putting pressure on the government to increase their commission by threatening to disrupt the supply of cooking gas if their demand is not fulfilled.
Gas bottlers are putting pressure on the government to increase their commission by threatening to disrupt the supply of cooking gas if their demand is not fulfilled.
State-owned Nepal Oil Corporation, the sole importer of liquefied petroleum gas in the country, gives bottling plants a commission of Rs19 per cylinder. Factory owners are upset that their commission has remained unchanged since 2013 even though operating costs have swelled tremendously.
The bottlers issued a 10-point demand on Wednesday, and warned that they would launch a protest if the government did not fulfil them within 10 days. They said they would completely halt the supply of gas from March 14.
Gokul Bhandari, president of the Nepal LP Gas Industry Association, said that gas plants had been pleading with the Ministry of Industry, Commerce and Supplies to increase their commission for more than five years.
According to Bhandari, the ministry had formed a committee led by former National Planning Commission member Puskar Bajracharya in 2013 to provide recommendations on the amount of commission that should be paid to bottlers. “The panel had recommended a commission of Rs52 per cylinder, but it was slashed to Rs19,” Bhandari said.
During the same period, Nepal Oil Corporation was able to recover its losses valued at Rs36 billion, and even earn immense profits, as international oil prices fell. “However, the corporation did not pay any heed to our grievances,” Bhandari said. He added that gas bottlers were facing rising operating costs due to a hike in fuel costs, insurance premiums and freight charges. The mandatory Nepal Standard Certification Mark has also pushed up their expenses, he said.
In October, the government formed another panel headed by joint secretary of the Finance Ministry Udaya Raj Sapkota to examine the grievances of gas bottlers. It was supposed to submit its report within 45 days, but nothing has happened even though more than four months have passed.
Among the demands made by bottlers are an annual revision of the commission rate, uniform price of cooking gas across the country and an increase in purchase delivery order quotas based on their turnover. They also want the purchase delivery order to be issued electronically as the manual system was leading to import delays.
Gas bottlers are also unhappy that the government had not taken up more strongly with the Indian government to issue explosive licences to Nepali gas trucks, as it has remained pending for years. “Due to the government’s apathy, gas companies risk losing billions of rupees that they have invested in buying gas bullets,” said Bhandari, adding that 53 Nepali gas bullets were stranded in India for lack of permits.
Bottlers expressed concern over Nepal Oil Corporation issuing licences to new bottling firms. There are 56 gas bottlers in the country. As per the association, most of these companies are operating at 40 percent capacity. Nepal imports 35,000-40,000 tonnes of cooking gas per month. Demand for the fuel is growing at the rate of 17 percent per annually, according to Nepal Oil Corporation.