Gas bottlers called off their protest on Tuesday after the Nepal Oil Corporation agreed to prepare a report in the next 15 days with recommendations to resolve the ongoing dispute between the two sides.

During the talks held at the Ministry of Industry, Commerce and Supplies on Tuesday, the ministry also announced that it would form a high-level team to prepare a roadmap for the overall management of the petroleum business.  

The ministry had formed a committee under NOC Acting Deputy Managing Director Nagendra Sah on Friday to address the concerns raised by gas bottlers.

The bottlers have stopped receiving purchase delivery orders, commonly called PDOs, for over a week to mount pressure on the NOC to increase their subsidies.

The state-owned oil monopoly issues purchase delivery orders to cooking gas companies, and accordingly they import liquefied petroleum gas from the Indian Oil Corporation. The gas bottlers have stopped receiving the purchase delivery orders since last Friday, are demanding that their operating subsidies be increased to Rs400 per cylinder, including their commission.

At present, gas companies receive Rs115 per cylinder as subsidy from the NOC.

Revising the operating subsidies, scrapping of the unlawfully issued licence to the new gas companies, uniformity in pricing of the LPG across the Tarai region, effective initiative from the government authority to operate the Nepali gas bullets and increase in import quota based on the certified cylinders with the gas companies are among the demands of the LPG bottlers.

Earlier, the bottlers had threatened the government authority to completely halt the gas supply from March 14, if their demands are not addressed on time.

“Our problems were put on hold for a long time just on the pretext of forming study committees, the recommendations which were never implemented,” said Gokul Bhandari, president of Nepal LP Gas Industry Association.

Although the NOC, through a press statement on Monday, claimed that there was no short supply of cooking gas, the stock is fast depleting, largely due to panic buying in the wake of protests launched by the gas bottlers.

Ram Kumar Khadka, proprietor of Khadka Gas Depot in Maharajgunj, said the demand for liquefied petroleum gas has gone up by around 40 percent in the past one week.

Cooking gas bottlers, however, do not seem to be giving two hoots to the country’s  consumer protection laws.

The Consumer Protection Act 2018 and Essential Service Operation Act 1957 state that essentials service providers cannot disrupt the supply and delivery of essential goods, including cooking gas.

But the government authority has neither effectively implemented the existing laws nor development a strong mechanism to resolve the problems permanently.

Earlier, the government had worked out a plan to allow private sectors to do petroleum business. But it is yet to materialise.

“Had the private sectors been given licence, most of the problems seen in the sector could have been resolved,” Purushottam Ojha, a former commerce secretary, told the Post.

According to him, the government had drafted an act about a decade ago aimed at allowing the private sector to do petroleum business. “However with change in the government, it was never implemented,” said Ojha.

Many also question the rationale behind issuing licences to companies haphazardly and even the NOC’s role in cooking gas business, as its job is only to issue product delivery orders.  

“Had the NOC not issued licence to new gas companies haphazardly, this situation would not have arisen,” said Ojha.

There are 56 gas bottling companies, which Ojha says too big a number for a country like Nepal.

“The private sector can develop their own mechanism, and competition in the market would make it easier also for consumers,” Ojha said. “The NOC then can play the role of market maker.”

While gas companies are to blame for the problems created for consumers, the NOC also share part of the blame, Ojha said.

Experts say if the private sector is allowed to do petroleum business, competition will guide the market. “Either both the private sector and the NOC should be allowed to do the business or the NOC has to play a key role in effective regulation to resolve such problems permanently,” said a former managing director of the NOC, requesting anonymity. “As NOC provides the subsidies that cover even the cost of fixed capital of gas companies along with the guaranteed amount of profit, the protest from gas bottlers is unjust.”