Calls intensify for formulation of Petroleum Act

- Post Report, Kathmandu

Feb 16, 2017-

Calls for the formulation of a Petroleum Act have intensified to control malpractices in the liquefied petroleum gas (LPG) business. Lack of laws has prevented Nepal Oil Corporation (NOC) from effectively regulating the sector which is increasingly coming under the influence of private entrepreneurs, participants said at an interaction organised by the Nepal LP Gas Industry Association (NLPGIA). 

While NOC has been blamed for enforcing the regulation as per its will to benefit a select few, gas bottlers have been criticized for failing to protect consumer interests and focusing on profits by taking advantage of its lax enforcement. “In the absence of a related act, NOC itself has been found violating its own circulars and bylaws,” said Madhav Timilsina, president of the Consumers’ Right Investigation Forum. 

On a number of occasions, NOC has been caught disregarding its own rules. For instance, the state-owned oil monopoly provided permits to 34 new gas bottlers in the last four years although it had placed a moratorium on the issuance of import licences. 

NOC has failed to implement the much-hyped colour coded gas cylinder system even after making long preparations. Similarly, the enterprise has recently allowed a private company to conduct transactions in composite cylinders. NOC Managing Director Gopal Bahadur Khadka has been criticised for allowing the use of composite cylinders without making the necessary laws. As per a source, the private company dealing in composite cylinders is operated by Khadka’s near and dear ones.

Participants at the interaction blamed NOC for amending the regulation and bylaws just to fulfill the vested interests of its high ranking officials and individual traders. NOC has recently amended LP Gas Transport Bylaw 2017 and LP Gas Bylaw. Gas bottlers have refused to obey the amended laws arguing that it was a unilateral decision of the corporation. 

NLPGIA President Shiva Ghimire said, “Instead of enforcing the new regulation to reform operations and maintain transparency, NOC has been using it to benefit a handful of people,” he said.

Ghimire said the association on Wednesday handed over a 17-point memorandum to the Supplies Ministry and NOC to address the problems existing in the sector. Gas bottlers have urged the government to raise the commission of bottlers and dealers, not to issue licences for new bottling plants, provide adequate quotas to gas bottlers and begin work to acquire an explosive licence for Nepali gas bullets from Indian authorities. 

Their demands include reimbursing them for the cost of rerouting and the detention charges they had to pay during last year’s Indian blockade. Likewise, they have asked the government to help the private sector to construct storage plants for cooking gas. Waiving value added tax, local tax and surcharges on the gas business is also among the gas bottlers’ demands. 

Ghimire said they had given a seven-day ultimatum to the government to fulfill their demand. “If the government fails to address our demands, we will be compelled to launch a protest by obstructing gas deliveries,” he said. Meanwhile, consumer rights activists have blamed gas bottlers for failing to protect consumer interests. They said bottlers had sold an excess number of gas cylinders, failed to increase public awareness about the safe use of gas cylinders and distributed substandard gas cylinders without following the Nepal Standard.  

Meanwhile, NOC said it had initiated the process of reimbursing bottlers for the amount spent on rerouting shipments and detention charges last year. “The NOC board has been discussing the excess detention charges sought by bottlers,” said Deepak Baral, director at the LPG department of NOC. 

Baral added that they were also issuing an adequate number of purchase delivery orders as per the demand of gas bottlers.

Published: 16-02-2017 09:15

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