LPG Price Increased Amid Disaster Following Collaboration Between Nepal Oil Corporation and Industrialists

After a landslide blocked the Prithvi Highway at Krishnabir, the price of cooking LPG within the Kathmandu Valley has been increased by NPR 1,005.38 per cylinder. According to a decision by the Federation of Industries, the new price for LPG in Kathmandu Valley will be NPR 2,165.38 per cylinder. Industrialists have stated that since LPG must now be refilled in the Terai region and transported via alternative routes, transportation costs have risen, resulting in some burden being passed on to consumers. (September 3, Kathmandu)

Following the landslide at Krishnabir that rendered the Prithvi Highway impassable, industrialists, with the agreement of Nepal Oil Corporation, have raised the price of cooking LPG due to the higher cost of alternative transportation. While Nepal Oil Corporation had fixed the ex-factory price at NPR 2,060 per cylinder, industrialists increased the price by NPR 105.38 per cylinder citing the additional transportation fee. The Federation announced this price revision through a press release following its annual general meeting held on September 3.

According to the Federation’s decision, the LPG price in Kathmandu Valley will now be NPR 2,165.38 per cylinder. Former Federation president Shivprasad Ghimire explained that the landslide at Krishnabir has increased the cost of transporting LPG through alternate routes, necessitating some cost sharing by consumers. “Previously, LPG was transported by bullet trucks carrying 1,250 cylinders each, but now refilling in the Terai and transporting via other means has become more expensive,” he said. “Though the transportation cost is NPR 180 per cylinder, consumers will need to pay an additional NPR 105.”

Industrialists claim that the price hike has been implemented with the consent of Nepal Oil Corporation. The Federation explained that LPG industries in Kathmandu Valley are constrained to refill cylinders in facilities located in the Terai region, increasing transportation expenses. Gokul Bhandari, director of Nepal Gas Industry, clarified that the price increase is solely due to rising transportation costs rather than the purchase price of LPG itself. “The Oil Corporation reimburses transportation costs only up to the Terai region, not up to Kathmandu,” Bhandari said. “In accordance with the Corporation’s agreement and provisions, we have increased the price by NPR 105 per cylinder to cover additional transportation beyond 50 kilometers.”

He added that the industry’s actual expense is over NPR 200, but per Corporation regulations, only NPR 105 extra transportation cost can be charged, resulting in losses that the industry absorbs to ensure supply. Regarding the price hike, Nepal Oil Corporation spokesperson Manoj Thakur explained that the ex-factory price for cooking LPG is applicable only up to 50 kilometers from the factory. According to Thakur, industrialists themselves are permitted to add transportation charges for distances exceeding 50 kilometers. “The price set by the Corporation covers only 50 kilometers from the factory; beyond this distance, industrialists can add transportation charges on their own,” he stated. When asked whether industrialists increased transportation costs without the Corporation’s approval, Thakur clarified that this is an existing practice, not a new arrangement. “This is not a new rule; it has been in effect for some time. As industries in Biratnagar add transportation costs for distances beyond 50 kilometers, so do others,” he concluded.