Commission paid to gas bottlers hiked to Rs 259.88 per cylinder

April 25, 2019

Rajesh Khanal, The Kathmandu Post, April 25, 2019

Bowing to a long-standing demand from gas bottlers, Nepal Oil Corporation has raised their commission by Rs27.88 per cylinder. According to corporation officials, gas bottlers will receive a commission of Rs259.88 per cylinder from Thursday.

Out of the increased commission, gas dealers will get Rs5.47 more per cylinder, taking their total commission to Rs37.47 per cylinder. The increased cost will be passed on to consumers.

“The company has increased the commission to address the demand of gas companies,” said a source at the state-owned oil monopoly. Gas bottlers have been badgering Nepal Oil to increase the commission by at least Rs200 per cylinder citing a rise in operating costs.

Last month, gas bottlers stopped receiving purchase delivery orders for more than a week to put pressure on the corporation to increase their commission. Subsequently, it formed a panel to study their demand. Gas bottlers are not satisfied with the increase which they described as ‘peanuts’. They are also upset that the commission has not been revised for five years.

Gokul Bhandari, president of the Nepal LP Gas Industry Association, said bottling and supply costs had soared and the increased commission would not cover them. According to him, their operating costs consist of freight charges from Indian depots to the bottling plant, distribution costs to dealers and labour charges.

“In the last five years, almost all these costs have risen steeply,” said Bhandari. He hinted that gas bottlers would continue their protest despite the rise in their commission. “We plan to get together by next week to decide our next move,” he said.

Nepal Oil officials claimed that the increased commission paid to gas bottlers would not affect the price of essentials to the final consumer, but consumer rights activists said the extra financial burden would ultimately be passed on to the general public.

Madhav Timilsina, president of the Consumers’ Right Investigation Forum, said the effect of the additional financial burden would be seen in the next few months. “The price of petroleum products is likely to be increased in the near future,” he said.

Based on the country’s monthly requirement of cooking gas that stands at 40,000 tonnes, Nepal Oil’s financial liability is projected to swell by Rs78.53 million per month. As per the corporation, demand for cooking gas is increasing at around 15 percent annually.

Price of aviation fuel slashed

KATHMANDU: Nepal Oil Corporation has reduced the price of aviation fuel sold to international carriers by $75 per kilolitre with effect from Wednesday. As per the revised rate, the price of aviation fuel has dropped to $1,050 per kilolitre from $1,125 per kilolitre.

Birendra Kumar Goit, spokesperson for the corporation, said a board meeting of the enterprise on Monday decided to reduce the price of aviation fuel. At present, the net profit of the corporation stands at more than Rs520 million per month.According to Goit, the board meeting also decided to construct a gas bottling plant and a modern fuel refilling station in each of the seven provinces.