Gas bottlers' cartel flouts law as govt looks on

Published On: June 22, 2016 03:13 AM NPT By: Sujan Dhungana

KATHMANDU, June 22: Taking advantage of government fecklessness and ineffective laws and policies, cooking gas bottlers have started halting the import of liquefied petroleum gas (LPG), an essential commodity. But the government is in a fix whether to take action against them or not.

In a show of defiance against the law of the land, the gas bottlers have stopped collecting their product delivery orders (PDO) -- a must document for the import of cooking gas from India -- from state-owned Nepal Oil Corporation (NOC) for an indefinite period from Tuesday. They did not collect any PDO from NOC on Tuesday, according to a source at the Ministry of Supplies (MoS).

LPG -- popularly known in Nepal as cooking gas --  is imported and supplied by the private sector while NOC only plays a regulatory role. The bottlers have a monopoly over the supply of the gas and this has  given them an upper hand.

Reacting to the government's decision  last week to suspend PDO for Himalayan Petrochemical Pvt Ltd (which supplies HP Gas), Nepal LP Gas Industry Association on Monday directed all bottlers to not collect PDO from NOC for an indefinite period.This is against the Essential Services Operation Act, 2014.

Though the Consumer Protection Act 2054 and Essential Services Operation Act 2014  say that no one can affect the supply of essential consumer goods or services through the exercise of monopoly or any other means, LPG bottlers have challenged the government and halted the import of the cooking gas from today. The bottlers have also defied a ruling of the Supreme Court stating that syndicate and cartel activities are illegal. LPG bottlers have time and again halted the import of LPG despite the apex court ruling.

But the government has not been able to decide how to maintain the supply in case of 'illegal arm twisting' by the bottlers.

"Halting or trying to halt the supply of any essential goods is a crime,” said Madhav Timalsina, president of Consumers' Right Investigation Forum (CRIF), adding: “Bottlers openly trying to cartel the LPG supply is the result of an irresponsible government and inactive laws.”

Essential Services Operation Act, 2014 BS states that if a person restricts the functioning of essential services or refuses to accomplish or continue the function, he shall be punished with imprisonment of up to six months or fined up to Rs 200, or both. Similarly, anyone abetting such activities shall be punished with an imprisonment of up to one year or fined up to Rs 1,000, or both.  

“The government should take stern action against those defying the law,” added Timalsina.   
NOC officials, however, said that bottlers' action will not hit the supply immediately. "They have already collected most of the PDO for June and not collecting PDO for a few days will not affect the market. Out of 34,000 tons of LPG for which PDO was announced in June, bottlers have already collected PDO for 33,000 tons as of Monday,” Mukunda Ghimire, spokesperson of NOC, told Republica.

Ghimire was not in a position to explain what action NOC will take against the bottlers.

Meanwhile, MoS on Tuesday wrote to Nepal LP Gas Industry Association asking them to sit for dialogue. "We will sit for dialogue on Wednesday. We will urge the bottlers to foster an environment for compensating the families of those who lost their lives after HP Gas cylinders exploded in Lalitpur last month,” said Ghimire.

Three people died following the explosion of HP gas cylinders in Lalitpur on May 20, and consumers claimed that the explosion was due to a defective gas cylinder. 

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