It even instructed the corporation to take stern action against bottlers if required, to get the program to introduce dual cylinder and segregate the LPG market implemented. [break]
“If required, we have asked the NOC to stop issuing gas or even terminate the operating licenses of the LPG bottlers who are resisting the implementation of this crucial program,” said Krishna Hari Baskota, secretary at the Prime Minister´s Office (PMO).
The government in July had decided to introduce different cylinders in the LPG trade as its initiative to separate supply chain for household and commercial ventures so that it could introduce dual pricing in a medium term.
The decision was taken after it faced difficulty in adjusting retail price of LPG in line with the international trend due to strong resistance from students and consumer groups. Owing to this failure, the NOC had suffered a loss of Rs 5.5 billion from LPG trade in the last fiscal year alone. At present , the corporation is suffering a loss of Rs 610 million on LPG trade every month.
“LPG is a product which is used by consumers belonging to all income groups. Introduction of dual cylinder will help us differentiate consumers that need subsidy and that do not,” Baskota told Republica.
Even though the government first announced of implementing the program on August 17, it repeatedly deferred the implementation timeline owing to the strong resistance from the bottlers. Its last announcement was to implement the program from November 16. But it failed to execute it then as well.
Given such situation, Prime Minister´s Office had called the acting chief of the NOC Suresh Kumar Agrawal to take stock of the situation and initiatives it had taken so far to get the program implemented.
When Agrawal informed that he could not implement the program due to bottlers´ resistance, Baskota instructed him to execute the program at the earliest and take strong actions against the bottlers if they resisted its implementation yet again.
Going by the government´s decision, NOC has already instructed the bottlers to circulate red colored cylinder to supply gas to the household consumers, blue colored cylinders to distribute LPG to commercial consumers such as hotels, restaurants, party palaces, factories and automobiles.
But the bottlers have refused to comply. In August they even launched a strike and went to the extent of stopping imports protesting the decision, something which forced the NOC to defer its step.
The bottlers have been resisting the dual cylinder arguing that differentiating the cylinders would inflict them a cost of some Rs 500 million.
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