“We have already tabled a proposal to this effect at the NOC board,” said the corporation´s Managing Director Digambar Jha. The board has not yet endorsed it though. [break]
Corporation chief stated that introduction of low-capacity cylinder apart from the existing 14.2 kg cylinders was necessary to increase access of poor people to gas, which is efficient and relatively clean fuel than kerosene.
Currently low-end consumers rely on kerosene for cooking, even though it is expensive than LPG by Rs 15 per liter. Many attribute the situation to the higher cost of LPG cooking system, which stands at around Rs 5,000.
“If we could introduce 5 kg cylinders, it will lower first time installation charge of LPG to around Rs 2,000. This will make the switch affordable and easy,” said Jha.
Because of smaller size and lower weight of the 5 kg cylinder, corporation says consumers in rural and remote hills too can transport it for cooking. “This will help consumers in rural areas to switch from firewood and traditional fuels to LPG, thereby contributing to environment conservation,” said Jha.
Citing such advantages, the corporation has sought permission from its board to launch the new cylinders as a test project in Nepalgunj.
“The reason for choosing Nepalgunj is; it is main supply point of essential commodities to remote parts of mid- and far-western regions like Karnali. This will help us assess how the project will impact the poor,” said Jha.
If the project yielded positive results, it has proposed for circulating such cylinders in limited numbers for the poor in the urban areas.
Corporation officials, who highlighted the advantage of the new proposal, categorically refrained from speaking on how it will support ending subsidy on gas, which presently stands at Rs 7 per liter. The subsidy costs NOC Rs 140 million a month.
Because of subsidy, consumers get LPG at Rs 50 per liter, whereas kerosene is priced at Rs 65 per liter. This price distortion has primarily led to swelling of LPG consumption to as much as 15,000 from 9,000 tons a couple of years ago.
However, corporation´s top officials who prefer to continue subsidy on gas rule out such changes.
Jha told myrepublica.com that the corporation could pledge subsidy of Rs 10 per liter of gas for such cylinders.
However, knowledgeable people said that the proposal might not be as good as it appears politically. First, the cost of manufacturing small cylinder will not be as cheaper as NOC has perceived. Secondly, NOC has not yet developed convincing plan on it will control possible leakage.
“Also it is silent on how will the Department of Standards and Metrology monitor standard and internal cleanliness of cylinders. In its absence, risks of accidents could soar,” said an official at Ministry of Industry.
milan@myrepublica.com
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