LPG Shortage Persists in Nepal Despite Oil Corporation's Claims of Supply Normalization

Although the Nepal Oil Corporation (NOC) claims that the supply of cooking gas in the market is gradually becoming smooth, the actual situation remains difficult for consumers.

Due to the widening gap between demand and supply, consumers are unable to easily obtain gas. The Department of Commerce, Supply and Consumer Protection has also concluded that the main reasons for the shortage of cooking gas in the market are increased demand and reduced supply.

According to business operators, it will take another 10 to 12 days for the market to fully normalize. Currently, the demand for gas in the market has increased abnormally. According to Maheshwar Ghimire, Depot Manager for Everest and Sugam Gas, gas has been imported at 75 to 80 percent of the regular consumption rate.

However, daily demand has increased by 400 percent. This is also due to consumers hoarding excessively out of fear that the current demand might lead to a shortage beyond the actual situation.

'For some companies, the demand is up to six times higher than the supply. Sugam and Everest Gas alone have a daily demand of 31,000 cylinders, but the supply is only around 5,000,' said Ghimire.

Bimal Kalakheti, a working committee member of the LP Gas Industry Association and Managing Director of Lumbini Gas Industry, also stated that demand has doubled. He mentioned that while normal daily demand is between 3,000 to 3,500 cylinders, it has now reached 6,000.

What is the reason for the shortage?

Business operators have pointed out three main reasons for the gas shortage: issues with the tender process and transportation in India, technical and seasonal disruptions, and the hoarding tendency among consumers, which they argue has created an extreme shortage in the market.

The problem has arisen due to the new tender process for bullets, which Indian government companies conduct every 5-5 years. Indian transporters have cut down on bullets coming to Nepal because they receive higher freight charges within India. Furthermore, machinery problems at India's Mathura Refinery and dense fog in the Terai region have prevented gas bullets from arriving on time.

Similarly, the analysis by businessman Kalakheti suggests that the tendency of the general public to keep 2-3 filled cylinders at home due to the fear of upcoming elections and past blockades has created an 'artificial shortage'.

Following the chaos over gas supply, the Nepal Oil Corporation has initiated special measures. Since the shortage was particularly visible for Everest and Nepal Gas in Kathmandu, the corporation has arranged for sales from its old office in Teku. This arrangement was made for the general public following increased complaints that only influential people were getting gas.

When will it normalize?

The Nepal Oil Corporation has supplied 4,000 metric tons more gas this month compared to the previous month, totaling 51,000 metric tons. According to business operators, the loading and arrival of new bullets have already begun.

'It will take some time to address the current demand,' said Depot Manager Ghimire, 'It may take another 8 to 12 days for the situation to ease.' Industry operator Bimal Kalakheti also claimed that the supply system would be fully normalized within one to one and a half weeks.

Furthermore, business operators have urged consumers not to hoard gas unnecessarily and to remain patient.