Former LPG Association Chairman Shivaprasad Ghimire Proposes LPG Subsidy Reform

Kathmandu. Former Chairman of Nepal LP Gas Industry Association Shivaprasad Ghimire has emphasized the need to modify the subsidy provided by the government on cooking gas (LPG) to focus on targeted groups. Speaking at a meeting of the Industry, Commerce, and Consumer Welfare Committee of the Federal Parliament on Wednesday, he proposed selling gas at the full price to general consumers and providing subsidies to the poor through 'cashback'.

Ghimire, who has four decades of experience in the petroleum sector, stated that a scientific pricing system is necessary to reduce the losses of Nepal Oil Corporation and make the organization commercially strong. He expressed concern over the compulsion to rely entirely on Indian vehicles for transportation due to Nepal not having its own gas bullets. He mentioned that although the government provided a 66 percent discount on customs for Nepali bullets, they could not be operated due to obstruction from Indian bodies. Currently, gas is being transported by approximately seven hundred Indian bullets, which he noted also poses a challenge to national security. He recalled that during the blockade, petroleum products could be imported to some extent because of having own tankers, but gas supply was halted due to the lack of own vehicles.

Ghimire stressed the need to build storage capacity within the country for at least one month's supply for a permanent solution to gas supply. According to him, Indian Oil Corporation (IOC) is willing to lay a gas pipeline to Nepal. He pointed out that despite the government's talk of promoting electric stoves, there is insufficient infrastructure. He argued that electric stoves cannot completely replace gas until the transmission lines, transformers, and internal wiring of houses are strengthened.

Speaking at the meeting, former chairman Ghimire said, 'It is not practical for the capable class to also receive subsidies.' He added, 'Like in India, a policy should be adopted to identify target communities and provide them with direct subsidies, and for others, sell at full price with a small profit.'

Mentioning that IOC is ready to build the pipeline, he said that storage facilities can be constructed in the Simara area on government land through a public-private partnership (PPP) model. He expressed confidence that the problem of consumers hoarding more cylinders than necessary due to fear of shortage would be automatically resolved if adequate storage and regular supply could be guaranteed, as consumers tend to hoard cylinders due to fear of scarcity.