KATHMANDU, NOV 11 - 2012
The Ministry of Finance (MoF) has asked the Ministry of Commerce and Supplies (MoCS) to submit details of the cost for subsidising liquefied petroleum gas (LPG) for household users.
The government plans to enforce the much-talked-about dual cylinder system (red for general consumers and blue for commercial users) from November 16. On the same day, the government will start distributing colour-coded cards differentiating household and industrial users.
The government plans to sell blue cylinders at the cost price, while red cylinder users will be provided with a certain amount of subsidy. According to Nuta Raj Pokhrel, under-secretary at MoCS, the ministry had asked the finance ministry’s consent on the subsidy plan. “Although we have not received a formal letter, the ministry has asked for the cost estimates for the plan, he said. “The cost, however, is yet to be estimated.”
Suresh Kumar Agrawal, acting managing director of NOC, said the corporation was preparing a work plan on the subsidy regime. “The basic idea to differentiate LPG cylinders and consumers is to make the distribution system easy and provide subsidy to the targeted group only,” Agrawal said.
At present, Nepal Oil Corporation (NOC) is selling an LPG cylinder at Rs 1,470, incurring a loss of Rs 508 per cylinder. If the government plan materialises, blue card users have to pay Rs 1,978 of a cylinder.
“In the first phase, we will introduce colour-coded cylinders and consumer cards and then introduce the subsidy scheme to household users,” Agrawal said. “As it is the beginning, it could take two-four months to fully implement the system.”
As per the NOC plan, red card holders (household users) will have to purchase cylinders at the cost price and the allotted subsidy will be refunded later. Consumers can withdraw the subsidy amount from any bank or financial institution recommended by NOC by producing the purchase receipt.
However, Nepal LPG Industry Association (NLPGIA) has been opposing the government move saying the plan would expose bottlers to a heavy financial burden. With less than a week left to enforce the dual cylinder system, none of the bottling companies have painted their cylinders blue.
As per the plan, LPG bottling companies are required to paint 50 percent of their cylinders blue. “Companies have to abide by the government plan at any cost,” Agrawal said, adding enforcing the system will make supply smoother and regular and also regulate the market. Consumer rights activists, however, are sceptic about the government plan, as NOC had postponed the implementation date twice.
There are around 47 LPG bottlers in the country and an estimated 4 million LPG users across the country — 1.2 million of them in Kathmandu alone.
Source: The Kathmandu Post
The Ministry of Finance (MoF) has asked the Ministry of Commerce and Supplies (MoCS) to submit details of the cost for subsidising liquefied petroleum gas (LPG) for household users.
The government plans to enforce the much-talked-about dual cylinder system (red for general consumers and blue for commercial users) from November 16. On the same day, the government will start distributing colour-coded cards differentiating household and industrial users.
The government plans to sell blue cylinders at the cost price, while red cylinder users will be provided with a certain amount of subsidy. According to Nuta Raj Pokhrel, under-secretary at MoCS, the ministry had asked the finance ministry’s consent on the subsidy plan. “Although we have not received a formal letter, the ministry has asked for the cost estimates for the plan, he said. “The cost, however, is yet to be estimated.”
Suresh Kumar Agrawal, acting managing director of NOC, said the corporation was preparing a work plan on the subsidy regime. “The basic idea to differentiate LPG cylinders and consumers is to make the distribution system easy and provide subsidy to the targeted group only,” Agrawal said.
At present, Nepal Oil Corporation (NOC) is selling an LPG cylinder at Rs 1,470, incurring a loss of Rs 508 per cylinder. If the government plan materialises, blue card users have to pay Rs 1,978 of a cylinder.
“In the first phase, we will introduce colour-coded cylinders and consumer cards and then introduce the subsidy scheme to household users,” Agrawal said. “As it is the beginning, it could take two-four months to fully implement the system.”
As per the NOC plan, red card holders (household users) will have to purchase cylinders at the cost price and the allotted subsidy will be refunded later. Consumers can withdraw the subsidy amount from any bank or financial institution recommended by NOC by producing the purchase receipt.
However, Nepal LPG Industry Association (NLPGIA) has been opposing the government move saying the plan would expose bottlers to a heavy financial burden. With less than a week left to enforce the dual cylinder system, none of the bottling companies have painted their cylinders blue.
As per the plan, LPG bottling companies are required to paint 50 percent of their cylinders blue. “Companies have to abide by the government plan at any cost,” Agrawal said, adding enforcing the system will make supply smoother and regular and also regulate the market. Consumer rights activists, however, are sceptic about the government plan, as NOC had postponed the implementation date twice.
There are around 47 LPG bottlers in the country and an estimated 4 million LPG users across the country — 1.2 million of them in Kathmandu alone.
Source: The Kathmandu Post
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