Conflicting Reports Emerge Over LPG Gas Shortage in Nepal Amid Rising Winter Demand

Complaints are surfacing in the market regarding a shortage of cooking gas (LPG) at present. Consumers report returning empty cylinders after sellers responded with "no gas available" when they went to purchase it.

Gas industrialists have also informed that the market is facing a shortage due to reduced imports. In this situation, the government regulatory body, Nepal Oil Corporation (NOC), claims that sufficient gas is being imported and preparations are underway to increase the import volume further.

While the NOC insists there is no shortage in the market and urges the public not to heed rumors, industrialists state they cannot meet demand because imports have sharply declined.

No Shortage, Preparing to Increase Quota by 10 Percent: NOC
Despite complaints of a shortage of cooking LPG gas in the market, the NOC claims that the supply system is smooth. NOC Spokesperson Manoj Thakur asserted that there is no shortage in the market as rumored and that imports are proceeding regularly. "The news about a gas shortage in the market right now is just a rumor," Thakur said. "Gas is being imported in sufficient quantities to meet daily demand; there is no shortage."

According to Thakur, the normal daily consumption of gas is around 75 bullets, and imports are currently reaching up to 80 bullets. Although gas consumption tends to increase slightly during the winter season, he noted that the import volume has also increased accordingly.

The NOC has made further preparations to prevent gas shortages, keeping in mind the upcoming elections.

"Looking at the annual average, the monthly consumption is 45,000 metric tons, but to address the current demand, 49,000 metric tons of gas were imported in Poush alone," Thakur stated. "Therefore, there is no nationwide gas shortage overall."

Preparing for 10 Percent Additional Import Targeting Elections

The NOC has made further preparations to prevent gas shortages, keeping in mind the upcoming elections. Spokesperson Thakur said, "To ensure there is no shortage during the election period, we have decided to issue 10 percent more PDOs (Product Delivery Orders) than the regular quota."

Spokesperson Thakur clarified that some technical and transportation-related reasons are behind the rumors of a market shortage. He explained that when cylinders of major brands like 'Nepal Gas,' which have many customers, especially in the Kathmandu Valley, are delayed by 1-2 days due to the priority given by Indian transporters, rotation in the market is disrupted, leading to an apparent shortage.

"When demand increases in India, transporters choose routes that offer higher fares, which can sometimes delay the bullets coming to Nepal," he said. "If a specific brand's gas doesn't arrive for 1-2 days, it is natural for its customers to feel a shortage, but this cannot be called a national shortage. When rumors spread that there is a shortage, consumers start hoarding more gas than necessary, which actually creates an artificial shortage," he added.

He urged consumers not to panic and to purchase gas only according to their needs.

What Do Industrialists Say?

While Nepal Oil Corporation claims there is no gas shortage in the market, industrialists report that an acute shortage has begun. Contrary to the NOC's claims, one industrialist stated that a real shortage has started in the market. According to this industrialist, while cooking gas consumption typically increases by 10 to 15 percent during the winter season, imports have conversely decreased.

The main reason for the gas shortage is that Indian transporters are reluctant to carry loads to Nepal. This problem arises because the transportation fare provided by Indian Oil Corporation is higher than what Nepal Oil Corporation offers; thus, Indian bullets prefer to operate where profits are higher.

"To meet the current demand, 100 bullets or more of gas should be entering daily, but only about 70-75 bullets are arriving," the industrialist said. "I own 7 industries myself. In each industry alone, orders for 15,000 to 20,000 cylinders are pending. When dealers place orders, it means there is demand in the market, and we are unable to dispatch them on time."

Shiv Prasad Ghimire, the immediate past president of the LPG Gas Industry Association, also stated that while demand has increased due to winter, the market is experiencing a shortage because imports have sharply dropped. He noted that 75 to 80 bullets of gas arriving daily are insufficient for the winter season. "Gas is not arriving according to demand in winter," Ghimire said. "To meet the demand, gas supply should be around 100 bullets daily."

What is the Reality?

According to Ghimire, the main reason for the gas shortage is the reluctance of Indian transporters to carry loads to Nepal. This problem occurs because the transportation fare offered by Indian Oil Corporation is higher than that offered by Nepal Oil Corporation, leading Indian bullets to prefer routes with better profit margins.

Furthermore, Indian drivers are unwilling to come to Nepal because driving on Nepal's hilly roads is difficult and incurs higher vehicle maintenance costs. The plains routes in India are easier for them. Ghimire explained that transporters are reluctant to come to Nepal because in case of an accident in India, insurance and court procedures are simpler, whereas in Nepal, industrialists and transporters have to bear the hassle.

Chairman Ghimire also mentioned that loading issues have arisen due to technical problems (maintenance and quality issues) at the Barauni Refinery for the past 2-3 months. Additionally, the supply chain is broken because loading and customs work only 4-5 days a week due to different holidays—Nepal observes Saturday and India Sunday, along with Indian public holidays (like January 26).

Ghimire claimed that although the situation might normalize as winter subsides and consumption decreases, customs data confirms that imports have indeed fallen.

Customs Department statistics show that 274,805.11 metric tons of gas were imported during this period of the current fiscal year. In the corresponding period of the previous fiscal year, 265,457.68 metric tons of gas were imported. Accordingly, imports appear to have increased compared to the previous year, but monthly imports have decreased.

The Customs Department data indicates that 47,460.43 metric tons of gas were imported in Poush of the current year. In Poush of the previous year, 47,683.24 metric tons were imported. According to the department's statistics, imports in Poush this year were 222.81 metric tons less than in Poush of the previous year.