Image source, EPA/Shutterstock
Nepal Oil Corporation has mandated the sale of only half cylinders of cooking gas for three months. While the shortage in the market has somewhat eased, consumers, vendors, and entrepreneurs report various adverse impacts.
Pasang Sherpa, who runs a restaurant in Namche Bazaar, known as the gateway to Mount Everest, shared that consumers are facing significant losses due to this policy.
“Due to transport difficulties, the price of one cylinder here can reach up to NPR 6,000. Even for half a cylinder, transportation costs remain the same. I have some stock, so the impact hasn’t been severe yet, but I foresee problems increasing,” Sherpa explained.
Similarly, those residing and operating businesses in remote areas have suffered considerable losses as only half cylinders are available.
Even urban consumers have faced inconvenience due to this arrangement.
Various Challenges
Currently, the retail price per full cylinder is NPR 2,160 and for half cylinders NPR 1,080. Despite the smaller size, transportation fees to deliver the cylinders remain unchanged.
A full cylinder contains 14.2 kilograms of gas, whereas a half cylinder holds only 7.1 kilograms.
Campaigners say consumers are doubly affected by the half-cylinder availability.
“The transportation costs stay the same, but since the amount of gas in the cylinders is halved, the duration of use is shorter,” explained Jyoti Baniya from the Consumer Protection Forum.
She added, “Another problem related to the quantity is that entrepreneurs report there is approximately only 5 kilograms of gas in the half cylinder.”
Image source, Getty Images
Industry entrepreneurs are also dissatisfied with the half-cylinder rule.
“The Oil Corporation allows charges of NPR 45 to 47 per cylinder. But our transportation costs have increased, so we’re incurring losses. Being restricted to selling half cylinders has added to the problems,” complained Amit Agrawal, General Secretary of the Nepal LPG Gas Industry Association.
He highlighted that sending cylinders with less gas requires repeated handling, which damages the paint and the cylinders themselves.
Distributors, alongside industries and consumers, say they too are suffering impacts.
“The fees for loading and unloading remain the same, but the volume of business has decreased,” said Vinod Kafle, General Secretary of the Nepal Gas Sellers Association.
“Lower gas pressure in the smaller cylinders negatively affects hotels, restaurants, and consumers, which increases the risk of gas wastage,” Kafle added.
Measures to Address the Shortage
Signs of a cooking gas shortage began in Nepal even before the Middle East conflict erupted.
Following attacks on Iran by the United States and the blockade of the Hormuz Strait, LPG supply has been severely disrupted.
In response, the government implemented the half-cylinder distribution policy starting February 11 (Falgun 28 in the Nepali calendar).
Consumers and industry representatives requested a return to full-cylinder sales, to which the corporation responded.
“The key issue remains availability. The conflict in the Middle East is ongoing. Countries that import gas from India largely get about 60 percent of their supply from Gulf countries,” stated Manoj Kumar Thakur, spokesperson for the corporation.
“Previously, the full-cylinder distribution led to shortages in sales; now that has lessened. Our main priority is ensuring gas availability for all consumers in a convenient manner.”
Image source, EPA/Shutterstock
Thakur noted that gas import conditions remain challenging.
Nepal’s monthly gas consumption is approximately 45-46 thousand metric tons, with an import target of about 49 thousand metric tons, but imports have recently declined.
“Returning to full-cylinder distribution is difficult until international situations stabilize,” he added.
The corporation is incurring significant losses from LPG business operations.
“A loss of NPR 1,154 occurs per cylinder,” the corporation reported.
According to the corporation’s latest data, they face a loss of NPR 628.6 million every 15 days across different petroleum products.
Risk of a Major Crisis?
However, industry officials warn that failure to resume full-cylinder distribution could trigger a severe market crisis.
“Demand will surge once full-cylinder distribution is reinstated. Consumers are hesitant to buy only half cylinders and prefer waiting in hopes of full cylinders being available again,” said Amit Agrawal of the LPG Gas Industry Association.
He urged the government to import more than the immediate requirement and make an informed decision on full-cylinder distribution. Without thorough preparation, the ensuing market crisis could be severe, especially as domestic consumption grows during winter.
“During previous shortages, consumers at least had minimal stock. Now, few are interested in buying half cylinders. When the announcement for full cylinders comes, demand will spike instantly and will be hard to manage.”
“Delaying these issues could lead to a severe crisis.”
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