Following the ‘artificial shortage’ of gas and arbitrary price increases, some consumer rights groups have accused the government of inaction. After a landslide occurred in Krishnabhir on the Prithvi Highway, increased transportation costs via alternative routes led businesses to raise the price of cooking gas in Kathmandu. “It is ironic that the government’s responsibility to regulate prices is being taken over by businesses,” said Vishnu Timilsina, General Secretary of Consumer Forum Nepal. “Currently, obtaining gas is very difficult and only possible by paying higher prices.” Similarly, Bimala Khanal, Chairperson of Consumer Eye Nepal, criticized the government, saying it is “encouraging the black market.” “Despite the gas shortage persisting for months, no solution has been found. Now, the natural disaster is being used as an excuse.”
Recently, the LP Gas Industries Association instructed all LPG distributors in the valley to sell gas cylinders at the Nepal Oil Corporation’s fixed price of NPR 2,060 per cylinder, plus an additional NPR 105.38 for alternative transport costs. This amounts to a maximum of NPR 2,165.38 per cylinder. How is gas entering Kathmandu amid these circumstances? The supply chain for LPG cooking gas, already affected by the conflict in the Middle East, has worsened due to the landslide at Krishnabhir. After approx. 100 meters of road collapsed on Bhadra 14 (August 30), this road segment was severely impacted. According to Nagendra Sah, Chief of Nepal Oil Corporation, about 30,000 cylinders enter Kathmandu daily on average. “Normally, 35,000 to 40,000 cylinders are needed daily,” he stated. “We should be satisfied that even fewer cylinders are arriving given the roadblock.”
Information from Nepal Oil Corporation shows that 16 industries delivered 87,877 cylinders to Kathmandu on Thursday, Friday, and Saturday. About 19 LPG filling plants operate in Kathmandu, but due to the roadblock in Krishnabhir, large gas trucks are unable to reach Kathmandu directly. “Businesses are filling gas cylinders in places like Hetauda, Birgunj, Nawalparasi, and Dhanusha,” said Sah. “We are making efforts to ease logistics during this crisis.”
Usually, the Nepal Oil Corporation sets the prices for diesel, petrol, and gas. However, with businesses now adding extra transport costs and setting gas prices independently, some consumers perceive this as irregular. “The government has shown no role or vigilance as businesses hike prices,” noted Timilsina from Consumer Forum. Meanwhile, Gyaneshwar Aryal, Chairman of the Gas Sellers Federation, argued that the added transport costs should be viewed as assistance under special circumstances. “Large hotels have been willing to pay extra transportation charges just to keep their businesses operational,” he explained.
Nepal Oil Corporation’s Sah confirmed that under current conditions, businesses are permitted to add extra transportation charges. “Business operators must sell gas at the fixed price within a 50-kilometer radius from the plant, and price hikes are not allowed there. However, in areas like Dashbariya, which are further away, they can add transport costs. This is an old rule, not a new one. During such difficult times, we urge restraint,” he emphasized. Aryal stated that the additional transport costs have not covered actual expenses. “The NPR 105 charge alone is not the issue. I am currently in Hetauda; to transport gas cylinders by Tata Mobile to Kathmandu costs NPR 35,000. If 80 cylinders are carried, it translates to about NPR 400 per cylinder.” “Though prices should not have increased, compromises are necessary in adverse conditions,” he added. Khanal from Consumer Eye Nepal insisted that the government should assume responsibility for transportation. “The government should provide subsidies or transport via government or military vehicles. Former Prime Minister Marichman Shrestha arranged for cooking oil supply by ship,” she said.
Sah from Nepal Oil Corporation argued that all stakeholders must collaborate to resolve the current problem. “Nature damaged the road. Complaining alone won’t solve anything.” “The Krishnabhir road will reopen soon. Once it does, the situation will normalize and gas will be sold at NPR 2,600 in Kathmandu,” Sah said. However, Timilsina from Consumer Forum pointed out that while gas is available in the market, it is primarily through the black market. “Consumers who should get gas at NPR 2,600 are paying NPR 2,780.” They urged the government to immediately intervene and control the situation. “Otherwise, traders will maintain this condition for a long time.” Aryal of the Gas Sellers Federation said any misconduct found should be penalized. “I can’t say there is no malpractice. It might exist in some places.”
Market monitoring in Nepal is generally conducted by the Department of Commerce, Supplies, and Consumer Protection. According to Director Anil Kirati, monitoring has intensified, but few black market activities have been detected. “Usually, three teams are deployed; now we have ten teams active. Recently, in Bhaktapur, we fined a businessman NPR 300,000 for malpractice related to gas. Several minor actions have also been taken.” He explained that lack of solid evidence that prices exceed fixed rates makes enforcement difficult. “Because complaints keep coming, we are discussing how to enhance enforcement,” Kirati said.
