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Government postpones plan, again

KATHMANDU, NOV 29 -

The government has postponed its plan to introduce colour-coded liquefied petroleum gas (LPG) cylinder once again, saying more homework was needed.

The third postponement of the plan came after LPG bottlers refused to support. The plan was unveiled a year ago.

According to Deepak Subedi, spokesperson for the Ministry of Commerce and Supplies, a meeting held with the Nepal Oil Corporation (NOC) and other stakeholders on Thursday discussed the existing LPG regulation and bylaws and the government’s orders.

The LPG bottlers have been asking that the government amend the existing regulation to regulate the market before enforcing the dual cylinder system. Under the directive of Prime Minister Baburam Bhattarai, the Prime Minister’s Office last week had given a seven-day ultimatum to enforce the system to both NOC and LPG bottlers. PMO had warned of action against those dishonouring the directive.

Following the ultimatum, some LPG bottlers painted their cylinders blue and submitted the record to NOC. However, still a large number of bottlers are reluctant to follow the government directives, according to NOC officials. Subedi said a next meeting on Sunday will discuss what amendments are needed to the existing LPG bylaws. “The ministry has also decided to study the system implemented in India.”

Similarly, the existing Nepal Standards regulation is also being studied for necessary amendments. “A study will be conducted on technical aspects, bottling plants and safety measures, among others in India.”

Based on the study, necessary amendments on bylaws will be recommended to the ministry. “The study draft will then be produced to the ministry for approval,” he said.

Earlier, the government had planned to introduce the system from Nov 16. However, the plan did not materialise due to persistence differences between NOC and LPG bottlers. The government plans to regulate LPG distribution and enable NOC to sell blue cylinders at the cost price.

By implementing the system, the government wants to end VAT refund privileges provided to industrial users and subsidise the commodity for certain targeted groups through a cross-subsidy mechanism.

 LPG bottlers have been opposing the government move, saying the plan to allocate 50 percent of the total cylinders circulated in the market to commercial users (blue cylinders) would expose bottlers to a heavy financial burden.

At present, NOC is selling an LPG cylinder at Rs 1,470, incurring a loss of Rs 508 per cylinder. There are around 47 LPG bottlers and an estimated 4.5 million LPG users across the country — 1.2 million of them in Kathmandu alone.

Posted on: 2012-11-30 08:57


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