Fuel shortage in Nepali capital gives opportunity to black market

People line up to exchange LPG gas after Market Inspection team raided a store at Patan, Nepal on Feb. 2, 2012. Kathmandu valley is facing huge crisis of petroleum products which began in December in 2011. (Photo DB: Xinhua)

Shortage of fuel in Nepali capital Kathmandu including petrol, diesel, Liquid Pressurized Gas (LPG) and kerosene oil which started in December 2011 still continues hard hitting the consumers.

Although there has been a slight relief in terms of petroleum products after the government started limited supply, there is still an acute shortage of the remaining.

However, the acute shortage has given opportunity to black market of LPG and fuel distribution.

In Kavre district of Nepal, some 40 km from Kathmandu, gasoline are being sold in retail shops while the gas stations are failing to meet the demands to the consumers queuing up for long hours.

A retail shop owner in Kavre Panchkhal in condition that his name would not be revealed said, “we have been queuing up in gas stations and bringing the petrol and selling them in our shops.”

Although he is aware that it is not a good practice, he said, ” we are not only making profit. The gas stations have been distributing limited petrol. Although they have stocks of petrol, they say they don’t have it.”

According to him, even if petrol is being sold in a high price, the consumers are still benefiting from the service rather than queuing up for hours in the gas stations.

The market price of petrol after the recent hike is approximately 1.5 U.S. dollars per liter. However, in retail shops it is being sold for 1.8 dollars per liter.

Similarly, the shortage of LPG has also distressed the consumers in the capital as the government has not succeeded in meeting the demands of the LPG.

Nepal’s monthly demand for LPG is 25,000 tons. However, Nepal Oil Corporation (NOC) has been able to supply only 11,000 tons giving rise to chaos in the LPG market.

Consumers have been queuing in front of LPG depot with empty gas cylinders with little or no success in receiving a new cylinder. Many cases of gas thefts and seizure have also been reported in the past.

Talking to Xinhua on Monday, consumer Dorji Pasang Sherpa shared his experience about the shortage saying, “we had been in the line since early morning but the gas depot refused to sell us the cylinders. We did not allow the cylinder gas to move till they sold the gas cylinders to us.”

Likewise, Executive Member of the LPG Industrial Association Rajendra Dallakoti also said that the black market was created as the LPG industries are selling the gas cylinders directly to the consumers instead of the dealers by charging them extra money.

The local consumers have been hit hard by the reason. “The industries are compelled to do so due to security reasons and hindrances in supply of the cylinders,” Dallakoti said.

He also added that the government’s commitment of providing loan to NOC had not yet been implemented because of which the shortage and chaos is being intensified.

The supply outside the capital is however, said to be normal.

According to Dallakoti, in lack of management and inspection of the market, the capital is facing a huge crisis.

“The problem is not just the shortage. Dealers have been taking advantage of the situation hiding the products to create a artificial scarcity and then sell it for a higher price. In the same aspect, the government has also failed to create an alternative source,” said Dallakoti.

NOC had stopped regular supply of fuel to petrol pumps after there was a reduction in import from India, which is the only source of petroleum products in Nepal.

However, failure on Nepal’s side to pay dues to Indian Oil Corporation (IOC) at the time of oil price hike in the international market is the key causes for the present crisis.

The government on Dec. 27, 2011 approved 3.12 million dollars loan with an aim to ease the shortage after the dues to IOC would be made. The government is also planning for further loan to NOC.

NOC still has a huge amount of due to pay back to IOC on fuel while India is itself facing the LPG crisis.

In addition, in January the government announced a hike in price. The announcement was followed by a thorough protest and agitation initiated by the students. It led the government to revise the price of the fuel.

With long hours of power cut and simultaneous shortage of one of the crucial needs for survival, the locals have undoubtedly been facing a difficult time. (Punjita Pradhan)

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