Image source, EPA
The Nepal Oil Corporation claims it is supplying about 120,000 cooking LPG cylinders daily to prevent shortages, but gas vendors report that this volume meets only around 60% of the demand.
According to gas vendors, although consumer pressure has reduced somewhat, it has not entirely eased.
“The demand seems to have dropped by about 40 percent,” says Vinod Kafle, General Secretary of the Gas Vendors Federation.
“But the pressure isn’t significantly reduced. At some depots, there can be queues of 80 to 150 people waiting.”
Image source, RSS
Manoj Kumar Thakur, spokesperson for the Nepal Oil Corporation, responsible for gas supply in Nepal, states that about 120,000 cylinders currently enter the market daily. The corporation has assured that the gas shortage will soon end.
Dipan Chand, president of the Gas Industry Federation, says that the industry is sending more than 120,000 cylinders daily to the market.
“Compared to before, 15 to 17 percent more gas is coming from India. However, this volume does not immediately satisfy the whole supply, but demand has decreased. I believe the effects will be visible within a week,” he said.
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He adds that gas bullets freshly filled in Barauni, India, are expected to arrive in Nepal within a week and this level of supply is anticipated to continue for the next two months.
According to the Oil Corporation, 42,500 metric tons of gas have been imported from India just in the Nepali month of Shrawan. Its spokesperson said that more than 100 gas bullets are crossing daily from India to Nepal.
Industrialist Dipan Chand explains that each gas bullet carries 18 metric tons of gas, enough to fill about 1,250 cylinders. Therefore, with 100 bullets arriving daily, around 120,000 cylinders can be filled each day.
The Oil Corporation states the average monthly demand in Nepal is roughly 47,000 metric tons of gas, equating to a daily consumption of 1,500 metric tons or 1.5 million kilograms.
Vendors say the usual daily gas cylinder demand in Nepal is slightly over 100,000. So why are there still long queues at gas shops even though 120,000 cylinders are delivered daily?
According to the Oil Corporation, industry officials, and vendors, there are three main causes for the gas shortage.
Impact of Half Cylinder Distribution
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Currently, the imported gas volume meets general demand, but four months ago the Nepal Oil Corporation began distributing only half cylinders.
After the Hormuz Strait was blocked due to conflict in Iran, it became difficult for the Nepal Oil Corporation to meet gas demand, which led to the introduction of half-cylinder sales four months ago.
However, even after the Iran-US truce, vendors and industrialists say consumers were reluctant to refill cylinders.
“Since half-cylinder distribution started, less gas has arrived. Instead of the expected 45,000 to 47,000 metric tons per month, only 30,000 metric tons have come so far,” Chand explained.
“People with half cylinders did not attempt refilling, but when full cylinders became available, they started refilling, which intensified the problem.”
After the government resumed selling fully filled cylinders, tensions in Iran rose again, prompting many consumers to rush for gas, vendors report.
Gas Vendors Federation General Secretary Kafle states that the sudden increase in fully filled cylinder distribution caused a surge in consumer demand.
Lack of Storage Infrastructure
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The shortage of gas storage infrastructure is another major cause of the current gas shortage.
Although plans to develop storage infrastructure have been regularly proposed, the required facilities have yet to be built, officials from Nepal Oil Corporation said.
Nepal has over 50 gas industries with a combined storage capacity of 11,000 metric tons, enough to meet demand for approximately five days.
Chand states that industrialists have long been requesting Nepal Oil Corporation to build storage infrastructure.
“We have already told the corporation to build storage facilities, or we are ready from the private sector to collaborate and construct them. We are even prepared to build them ourselves if a suitable policy is formed,” he added.
Though plans for gas storage and pipeline infrastructure were drawn up after the unofficial blockade by India in 2015, those plans stalled, possibly because of expectations that electricity would replace gas use.
Consumer Distrust
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Nepal relies entirely on India for gas imports. When conflict arises in Iran, which supplies gas to India, consumers fear unstable availability.
With growing tensions in the Middle East, some consumers have started hoarding gas, the Nepal Oil Corporation states. However, vendors and industrialists say uncertainty in supply has caused people to stockpile multiple cylinders.
“The shortage occurred because when full cylinder distribution resumed, several consumers appeared at once carrying four or five cylinders,” says Federation General Secretary Kafle.
Officials explain that consumers who had already been waiting for cylinders and those hoarding multiple cylinders created a rush to buy, causing difficulties for those with limited supply.
“If gas does not arrive from India for even one day, the impact can last for a week here,” says gas industry representative Dipan Chand.
The corporation has requested vendors to restrict sales to one cylinder per family.
The Nepal Oil Corporation suffers a loss of approximately NPR 1,000 per cylinder of gas sold, though the price for consumers in Nepal is about NPR 630 higher than in India. Currently, the cost to bring one cylinder to Kathmandu is NPR 3,238.
The corporation has fixed the retail price for one cylinder at NPR 2,060.
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