Speaking at Parliament´s Finance and Labor Relations Committee, Mahato stated that LPG in recent years has become popular household fuel among the rural consumers as well. “Hence, we intentionally refrained from adjusting its prices aiming to relieve the low end household consumers,” he said. [break]
The decision, meanwhile, compelled Nepal Oil Corporation (NOC) to retail LPG at Rs 50 per liter, inflicting the state-owned fuel monopolist a loss of Rs 7 per liter of gas and Rs 140 million a month from LPG business.
Mahato further cited his decision to jack up the prices of kerosene -- consumed by lowest income group -- to Rs 65 per liter and petrol to Rs 85 per liter, which allowed NOC to reap handsome profit on them, as a step to cross subsidize LPG.
In line with the experts, who had tagged adjustment and distribution of subsidy as unscientific and unfair, the lawmakers in the committee also flayed the decision.
Though they acknowledged that the household consumers need support from the state due to high inflation, they tagged the use of subsidy by commercial ventures as unwanted wastage of scarce state resource.
Salikram Jammakattel of UCPN (Maoist) urged the NOC to categorize gas consumers and introduce differential pricing for household and commercial consumers, introducing cylinders of different capacity for them.
This way, the lawmakers argued, that the government can generate a system of cross-subsidy within a product line, freeing consumers of other fossil fuel from the need to shoulder the cost of gas subsidy.
Speaking on the occasion, Commerce Secretary Purushottam Ojha stressed on the need to open petroleum imports to private sector to introduce competition and raise efficiency of the fuel monopolist.
He, however, stated that the bill tabled at the parliament to this connection has been returned to the ministry. “We will reintroduce it in the parliament for enactment yet again,” he added.
Ojha also stressed on the need to formulate long-term petroleum plan and increase NOC´s storage capacity to end the supply hiccups. He, however, did not divulge on what is preventing the government from taking steps to this direction.
NOC Chief Digambhar Jha advocated for providing subsidy in cooking gas in order to prevent deforestation and conserve environment in rural areas.
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