Gas bottlers, govt closer to agreement

KATHMANDU, Aug 15, 2012

The government and striking Liquefied Petroleum Gas (LPG) bottlers on Tuesday agreed form a technical committee to fix the profit margin on import and distribution of gas.

According to Narayan Bidari, director general of Department of Commerce and Supplies Management (DCSM), the committee would recommend the reasonable profit margin for bottlers after studying the transport fare and overhead costs while procuring and distributing the LPG.

“We have made a draft of an agreement incorporating the points agreed on previous negotiations. Hence, we have called agitating bottlers to come to us for formal negotiation.. We are ready to increase the profit margin if the study suggests so,” said Bidari.

Bottlers have demanded the government to raise bottlers´ commission (profit margin) to at least 5 percent of the retail rates, which at the present prices will stand at around Rs 70 per cylinder. So far, they were allowed to take profit of around Rs 30 per cylinder.

Nepal LPG Industries Association (NLPGIA) has also been demanding that the government withdraw its decision to introduce dual cylinder and pricing system planned to be enforced from August 17.

Bidari, who is also the coordinator of the government negotiating team, said the government was ready to resolve the problems that may crop up during the implementation of the dual cylinder system.

However, blue colored cylinders must be supplied to commercial consumers such as hotels, restaurants, factories and automobiles so as to making such users pay as much as actual import rate. As per the new system, the government will allow LPG bottlers to continue selling gas at the existing subsidized price to the household consumers in the red colored cylinders.

After series of talks between gas bottlers and officials of Department of Commerce and Supplies Management (DoCSM) failed to yield breakthrough, chief secretary Lila Mani Poudel intervened and issued strong warning to agitators to immediately withdraw their strikes or face tough action enforced through the Essential Service Act that provides sweeping power to law enforcement agencies enabling them to use force to intervene in supplying essential commodities including gas.

However, agitating bottlers said they have not fully withdrawn their demands. “Our agitation is still continuing though we are positive on some issue,” said Shiva Ghimire, senior vice president of the association, said.

Source: Republica

Gold imports up 114%

KATHMANDU, Aug 14, 2012

Even though price of gold is hitting new highs, country´s gold imports increased by a whopping 114 percent to 5,900 kg during fiscal year 2011/12, compared to imports figures of the previous fiscal year.

Value of imports increased by 150 percent to Rs 25.77 billion during the review period, thanks to rise in imports and strengthening weakening of US dollar against Nepali currency. Nepal had imported 2,800 kg gold worth Rs 10.72 billion in 2010/11.

The government has permitted import of 15 kg of gold a day through commercial bank from the last fiscal year, up from 10 kg a day in the previous fiscal year. It, however, had allowed banks to import 20 kg a day during February to July due to pressure from gold traders who argued that insufficient supplies had created black marketeering of the yellow metal in the market.

“Rise in imports and weakening of Nepali rupee against the greenback are the key reasons behind the whooping rise in gold import bill,” said Tej Ratna Shakya, president of Nepal Gold Silver Dealers Association.

In a bid to reduce growing trade deficit, the government had imposed ban on gold import between mid-August and mid-December in fiscal year 2009/10. Later, it imposed quota on gold imports, allowing designated banks to import and sell 10 kg gold a day.

According to traders, average daily demand for gold in the country hovers around 30 kg a day. If traders´ statement is anything to go by, the country is facing shortage of 15 kg of gold a day.

“This shortage had triggered smuggling of the yellow metal from India, China and Bhutan,” Shakya said, adding: “The government import quota cannot meet the demand in the market.”

Given the insufficient import quota, traders fear they will have to face shortage of yellow metal during the Dashain-Tihar festive season when demand goes up sharply. “If the government did not increase import quota, black-marketing and smuggling of the yellow metal will flourish during the festive season,” said Shakya.

Meanwhile, gold price went up by Rs 200 per tola (11.664 grams) and was traded at Rs 57,400 per tola in the domestic market on Monday. The association raised gold price even though the price of the yellow metal dropped to US $1620 during Monday´s trading. Gold trading in the international market had opened at $1623 on the day.

Source: Republica