Spread the love

Kathmandu, July 15: State-owned Nepal Oil Corporation (NOC) has once again rolled out its long-shelved dual pricing policy for cooking gas, aiming to separate household and commercial users—an approach that has repeatedly failed in the past.

Currently, both groups benefit from government subsidies on LPG, even though only industrial and commercial users receive a 13% VAT refund. Household users are excluded from this refund, yet they share the same subsidised prices as hotels, restaurants, and factories. To sustain this subsidy, NOC compensates for losses by charging higher taxes on aviation fuel, indirectly raising airfares. The loss per LPG cylinder stands at Rs199, with the corporation bleeding nearly Rs1 billion every month.

To curb this imbalance, NOC has drafted a new guideline to end the blanket subsidy. Under the proposed system, cooking gas will be sold at cost price for all, but only a limited quota will be subsidised: eight cylinders annually for a family of four and two for individuals. The board of directors is currently deliberating on how best to refund this subsidy to eligible users.

Nepal’s attempts at dual pricing date back to 2012, when red consumer cards for households and blue cards for businesses were introduced. Then-Commerce Minister Lekh Raj Bhatta symbolically handed the first card to Prime Minister Baburam Bhattarai to mark the policy’s launch. Around 632,000 cards were issued, raising Rs6.32 million, but the funds disappeared without accountability, and implementation never took hold.

In 2013, a colour-coded cylinder system matching the card scheme was introduced, barring commercial users from using red household cylinders. Despite multiple attempts to enforce the rule—including notices in 2014 and 2015 and a revived plan under then-CEO Chandika Prasad Bhatta—the initiative collapsed under industry pressure. Further efforts in 2016, led by Supply Minister Ganesh Man Pun, also failed.

Now, NOC is making another push. According to Deputy Director Manoj Kumar Thakur, new guidelines will strictly limit subsidies and implement a digital tracking system. Users will need to register on NOC’s online platform with personal identification and upload VAT bills each time they purchase LPG. Subsidies will be refunded directly to users’ bank accounts, on a monthly or biweekly basis. While consumers can use any bank, dealers must hold accounts with Rastriya Banijya Bank.

The system will automatically reject any subsidy claims exceeding the user’s quota. According to NOC, an average household of four consumes 8–10 cylinders per year. Despite an automated pricing system for petrol and diesel, LPG pricing still relies on monthly updates from Indian Oil Corporation, Nepal’s sole supplier.