Nepal Oil Corporation (NOC), the state-owned petroleum monopoly, introduced red cylinders for general consumers and blue cylinders for commercial firms as well as diplomatic agencies.[break]
As consumers using the gas for household purpose are yet to get cards to be eligible for state subsidy on the fuel, the price of gas bottled in both red and blue cylinders will remain same for the time being.
Though the government tried to introduce dual-color cylinders in the past, it couldn´t do so due to strong resistance from LPG bottlers, who said preparations were not sufficient.
But last week, the government was able to clinch a deal with LPG bottlers after it agreed to meet some of their unreasonable demands including rise in commission amount.
Following this, Minister for Commerce and Supplies Shankar Koirala formally launched the dual-color cylinder system at a function organized at NOC on Saturday.
Speaking on the occasion, Koirala vowed to incorporate the private sector in petroleum trade to ensure smooth supply of petroleum products in the market. Koirala also urged officials, consumer rights groups and entrepreneurs for effective enforcement of the dual-color cylinder system.
“Effective implementation of dual-color cylinder system is challenging. So we have asked concerned officials, entrepreneurs and consumer rights groups to join hands for effective monitoring to discourage possible abuse of LPG subsidy,” said Koirala, pledging to gradually introduce dual-color cylinder system across the country.
In the first phase, NOC has circulated dual-color cylinders in the capital, Jhapa, Biratnagar, Bhairahawa, Pokhara, Chitwan and Nepalgunj.
Suresh Agrawal, officiating executive director of NOC, said NOC has been suffering a monthly loss of Rs 600 million in LPG trade due to extension of subsidy. In the last fiscal year, NOC reported a loss of Rs 5.5 billion in LPG trade.
Shiva Ghimire, president of Nepal LPG Industries Association, said around 1.3 million cylinders are in circulation across the country, which is 35 percent of total cylinders owned by LPG bottlers.
Shiva Pudasaini, spokesperson of NOC said around 150,000 blue cylinders have so far been distributed by 52 bottling companies.
According to him, around 325,000 subsidy cards have been certified by NOC out of 400,000 forms filled up by consumers.
“We will fix prices of gas based on the color of cylinders once subsidy cards are widely distributed,” said Pudasaini.
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