Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: As long queues for cooking gas cylinders stretch across urban centers, a familiar narrative has resurfaced: authorities and industry players blaming consumers for the shortage. But a closer look at Nepal’s liquefied petroleum gas (LPG) market reveals a deeper, systemic failure—one that goes far beyond households stockpiling a few extra cylinders.
Officials from Nepal Oil Corporation, along with gas industrialists and distributors, have repeatedly claimed that “artificial shortages” are driven by consumers hoarding between two to fifteen cylinders per household. This assertion, however, stands in stark contrast to the ground reality—where ordinary citizens are forced to wait for hours just to secure a single cylinder.
What began as a localized shortage in the Kathmandu Valley over two months ago has now spread nationwide. From cities to smaller towns, households are grappling with acute supply disruptions, with the hardest hit being families dependent on a single cylinder.
The crisis has unfolded against a volatile global backdrop. Following joint military actions by the United States and Israel against Iran on February 28, geopolitical tensions have intensified, impacting global energy markets. However, experts point out that Nepal’s gas shortage predates these developments, suggesting domestic structural weaknesses are the primary cause.
Nepal remains entirely dependent on imports for LPG, primarily routed through Indian Oil Corporation. While India itself has not halted exports to Nepal, supply anxieties have surged amid regional uncertainties.
Despite claims from Nepal Oil Corporation that daily supply—averaging around 49,000 tonnes—has been maintained or even increased, the mismatch between supply and availability persists. This has raised serious questions about distribution efficiency and market regulation.
In a bid to manage the crisis, the government reintroduced the half-cylinder distribution system from late Falgun. The idea was simple: stretch limited supply to reach more households. In practice, it has failed to ease the burden.
Consumers continue to queue for hours, often returning empty-handed. Complaints of not even receiving half-filled cylinders are widespread, exposing the inefficacy of the intervention.
This is not the first time Nepal has resorted to such measures. Similar policies were implemented during the 2015 blockade and the early phase of the COVID-19 pandemic in 2020. Each time, the move highlighted the country’s chronic vulnerabilities—overdependence on imports and lack of storage infrastructure.
Industry data reveals a striking imbalance: Nepal currently has around 10 million cylinders in circulation, of which over 6 million are considered excess. Yet, there is no robust system to track, regulate, or retrieve these अतिरिक्त cylinders.
Experts argue that the crisis is less about absolute shortage and more about market distortion caused by uncontrolled distribution and hoarding—often facilitated by weak oversight.
“Blaming consumers is fundamentally misplaced,” says petroleum expert Sushil Bhattarai. “The entire micro-distribution system—from import to kitchen—is effectively controlled by private players. The state has little to no grip.”
According to analysts, the LPG sector operates under a de facto syndicate involving transporters, bottlers, and distributors. Logistics bottlenecks, bargaining among industry players, and reliance on Indian transport systems further complicate supply.
More critically, Nepal lacks a coherent policy framework. There are no clear rules on how many cylinders a household or business can hold. Nor is there a digital tracking system to monitor distribution.
Even Nepal Oil Corporation officials admit that the root cause lies in the absence of policy and system-level governance.
Critics argue that Nepal Oil Corporation has reduced itself to a passive intermediary. Its role largely ends at clearing imports at the border and handing them over to private bottlers.
Beyond that point, the distribution network operates with minimal oversight. Decisions on allocation—who gets how much gas—are left entirely to industry players.
This lack of regulatory control becomes most visible during crises, when the system collapses under pressure.
Adding to the chaos is the absence of a fixed price for empty cylinders. While the government regulates the price of gas, it does not set the value of the cylinder itself.
This loophole has enabled black market practices, with empty cylinders being sold at inflated prices during shortages. Consumers, desperate for supply, are often forced to pay significantly more than the official rate.
Consumer rights activists have strongly rejected the narrative that blames households. Madhav Timilsina, a leading advocate, has called the situation “a systemic failure disguised as consumer fault.”
He argues that past crises—such as the 2015 blockade—forced consumers to acquire extra cylinders in the first place. Now, the same behavior is being used against them.
“There is no transparency,” he says. “No data on how many cylinders exist, what they are worth, or how deposits are handled. This is a completely opaque system.”
Even as industrialists acknowledge the presence of excess cylinders, they have resisted taking responsibility. Some argue that how many cylinders a household keeps is a “private matter,” effectively shifting accountability away from producers and distributors.
This stance has drawn criticism, particularly given that the proliferation of cylinders was largely driven by industry expansion during past demand spikes.
Nepal’s LPG shortages are not new. From payment disputes in 2012 to the 2015 blockade and pandemic disruptions, the country has repeatedly faced supply crises.
Each episode has exposed the same underlying issues: import dependency, weak regulation, lack of storage, and absence of long-term energy strategy.
Experts warn that without immediate reforms—such as cylinder caps, digital tracking, and investment in storage infrastructure—the crisis will continue to recur.
Long-term solutions like pipeline infrastructure or a shift to electric cooking remain stuck in policy limbo, reflecting indecision at the highest levels of government.
Until then, the burden continues to fall on ordinary citizens—standing in line, carrying empty cylinders, and paying the price for a system that has failed to regulate itself.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
