"Subsidizing gas for household consumption has social justification, especially given the high inflation and soaring living cost. But pledging the same to the commercial consumers like hotels, restaurants and automotive sector is a gross misuse of state resources," PAC said in its decision. [break]
NOC´s records suggest that of the total 12,000 tons of gas imported in the country in a month, 40 percent is consumed by the commercial consumers. Of the commercial consumers too, 36 percent is consumed by hotels, restaurants, factories and other manufacturing units, while 4 percent is consumed by automotive sector.
Presently, NOC is suffering a loss of Rs 205 per cylinder (14.2 kgs). At this rate, NOC estimates that it is wasting over Rs 69.26 million for subsidizing the segment of commercial consumer.
"Worse for NOC is, with the improvement in tourists arrival and rising trend of people switching to gas-run geysers and generators, the volume of consumption by the commercial clients has only increased over the last few months," said Digambhar Jha, NOC chief.
Responding to the lawmakers´ queries, Jha said owing to this change the monthly demand for cooking gas has soared to 15,000 tons a month from 12,000 tons of the recent past. Two years ago, Nepal used to consume just about 9,000 tons of LPG.
NOC officials admitted that they had not anticipated such a rise in demand. On top of that, they said the Indian Oil Corporation (IOC) too supplied with lesser gas over the last two weeks, stating that it was installing new equipments in Barauni and Haldiya refineries to supply fuel of Euro III standard in near future.
"This mismatch had created a short supply in the market. But it will end soon as IOC has informed us that they will be supplying regular volume of fuel from Saturday," Jha said.
As for the differential cylinders and pricing is concerned, Supplies Minister Rajendra Mahato said there were some complications in implementing it. "Nonetheless, NOC is laying down necessary legal framework to enable implementation of PAC´s decision," he assured.
PAC also asked NOC to step up its capacity to store petrol at the Thankot depot, the main supply outlet for the Kathmandu Valley. "NOC´s present capacity to store fuel needed for just 5 days is not adequate," the PAC´s decision stated.
The parliamentary committee also tagged program to ´supply food to the remote food insecure hills´ as a program of national priority and urged the Ministry of Supplies to implement it seriously and on time so that serious food shortage could be avoided in the vulnerable districts.
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