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NOC ‘firm’ to bring dual cylinder system

KATHMANDU, NOV 08 -

The Nepal Oil Corporation (NOC) on Thursday said it was firm to introduce colour-coded liquefied petroleum gas (LPG) cylinders from November 16.

Consumer rights activists, however, are sceptic over the government much-publicised plan, as NOC had postponed the implementation date twice.

LPG bottlers are also opposing the government move to introduce dual cylinder system (red for consumer and blue for commercial users). However, the state-owned oil monopoly said the plan would be materialised and LPG bottlers had no reasons to oppose.

“As the move is purely aimed at benefiting consumers and identifying the actual commercial LPG users in the country, the plan will be materialised at any cost,” said Suresh Kumar Agrawal, acting managing director of NOC, at an interaction here on Thursday.

The dual cylinder system will also enable the loss making NOC to sell LPG at cost price to commercial users. While for consumers, a certain subsidy has been planned. “We will soon introduce cash subsidy for the targeted groups, particularly for household users,” he said.

However, Nepal LPG Industry Association (NLPGIA) has opposed the government move. Dharma Bartaula, representative of NLPGIA, said the plan to introduce blue-coloured cylinders (50 percent of the total cylinders circulated in the market) would expose bottlers to a heavy financial burden. “As painting a cylinder cost Rs 250, the plan will affect a large number of small bottling plants,” Bartaula said.

Opposing the NLPGIA claim, Ram Adhar Sah, director general at Nepal Bureau of Standards and Meteorology, said the painting cost would be nominal. “As a large number of existing cylinders circulated in the market have almost faded, they are required to be repainted anyway,” Sah said, terming NLPGIA’s claim of huge financial burden ‘baseless’.

Chandra Thapa, president of Gas Industry Association, Kathmandu chapter, said implementing the dual cylinder system will help NOC stop duty refund on LPG to commercial users. Currently, industries and hotels, among other commercial users, are enjoying a VAT refund facility on LPG. Consumer rights activists said the frequently postponing of the implementation date has made them sceptic about the government’s intention. “The government had announced the plan a year ago, but is still uncertain,” said Prem Lal Maharjan, president of Consumers Alliance for Consumer Right. He said the entire South Asian region, except Nepal, has dual cylinder system.

More than 1.2 million cylinders are consumed across the country every month. NOC said it is currently incurring a loss of Rs 508 on a cylinder that contributes Rs 610 million losses per month.

Posted on: 2012-11-09 09:15


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