Sugam Gas case calls into question LPG business


The case that surfaced last week involving Sugam Gas in which liquefied petroleum gas (LPG) cylinders were tampered with has called into question the way the business of LPG is being managed in the country.

The report of the High-Level Petroleum Sector Reform Taskforce submitted to Prime Minister Jhala Nath Khanal on Friday has pointed out that the Department of Industry (DoI) had been issuing licenses to bottling plants that did not meet the required standards.

According to the report, the DoI has not even coordinated with other concerned authorities while issuing the licenses. “There have been irregularities while issuing bottling licenses and allocating quotas,” reads the report. The report says bottling plants with a low storage capacity has been receiving excess product delivery orders (PDO). “With excess PDOs being provided, some companies have been found to be refuelling gas from the bullets (trucks carrying LPG) directly instead of storing it,” says the report.

Officials at the Nepal Bureau of Standards and Metrology (NEBSM) say large numbers of cooking gas cylinders in circulation are at high risk of explosion. “The major reason behind the problem is that Nepal Oil Corporation (NOC) has been allocating PDOs for gas to bottling plants in amounts greater than their storage capacity,” said Dev Muni Shakya, deputy director general of the NEBSM.

The Sugam Gas episode showed how far gas bottlers go. The company used to collect other gas companies’ empty cylinders, remove the foot rings, and attach foot rings bearing the batch number of Sugam Gas.

The NEBSM had been suggesting to the government to allocate certain code numbers in the cylinders under their respective company’s name to stop such activities. “If a bottling company is given 1 to 1,000 codes to its cylinders, consumers would know that they are using cylinders of the same company,” said Shakya. 

The NEBSM that used to monitor the quality and standard of gas and gas-related products from 1996 stopped doing so in 2003 after gas bottlers and dealers defied it. However, with gas explosion accidents increasing, the Ministry of Industry again called the NEBSM to take the suggestion regarding the technical part in June 2010.

Posted on: 2011-05-09 08:57