LPG firms withdraw strike, resume imports

Gas dealers get commission raise

LPG companies get additional transport cost while importing from Haldiya, Mathura

Companies not to oppose NOC´s entry into gas bottling business

Companies, NOC to negotiate provisions of LPG bylaw

KATHMANDU, July 1: Agitating liquefied petroleum gas (LPG) companies withdrew their strike Tuesday after Nepal Oil Corporation (NOC) agreed to allow a raise in transport cost while importing gas from Haldiya and Mathura and hike the dealers´ commission. [break]

The two sides reached an understanding late Monday after the companies dropped their resistance to NOC´s move to jump into the gas-bottling business.

Showing flexibility over their demand for scraping the new LPG bylaw, the companies also agreed to negotiate over provisions that concern them, by July-end.

That, however, defers implementation by a month of the bylaw aimed at protecting consumer interests, tightening the knot on companies resorting to quantity theft and circulating sub-standard cylinders, and regulating the liquified gas market.

“As NOC has addressed our demands, we have resumed import and distribution of cooking gas from Tuesday,” said Sita Ram Timilsina, coordinator of the talks team from the gas companies´ side. The two sides struck a deal at 10 p.m., Monday.

Earlier in the day, the gas companies had stopped import and retailing of LPG in a bid to pressure NOC to fulfill their demands. They barred imports of some 450 tons of gas and supply of about 32,000 cylinders (of 14.2 kg each) to the market.

That did not hit supplies though.

Going by the agreement, dealers retailing LPG will get Rs 28 as a sales commission for each cylinder of gas. The commission was Rs 25 per cylinder previously.

Likewise, the companies will get a transport cost raise of Rs 4.25 per kilometer per ton of gas while importing gas from Haldiya and Mathura.

“Since Haldiya and Mathura are about 300 kilometers farther from Kathmandu than Barauni, the regular import point, the new rate will be applicable for those additional kilometers only,” said Timilsina.

Nepal largely sources LPG from Indian Oil Corporation´s Barauni refinery. But when the Barauni refinery is shut down for maintenance and supplies there dwindle, NOC arranges companies to import gas from Haldiya and Mathura.

Supplies Ministry official in the talks team clarified that the new deal will not impact retail prices.

During the talks, the gas companies also withdrew their demand that the government not allow NOC to venture into the gas-bottling business.

Under the existing policy, NOC is not only an import monopolist but also the regulatory authority for the petroleum sector. Companies said they feared that the entry of a regulator into the sector could dampen business. NOC, however, committed itself to not acting unfairly.

NOC has announced it is to get into the gas-bottling business in a bid to make the government´s presence felt in the sector.