LP gas subsidy to target household consumers, not businesses

The government is preparing to limit the subsidy it provides on cooking gas to household consumers only, excluding commercial establishments such as hotels and industries.

Under Nepal Oil Corporation's price list effective from Kartik 14, the retail price of a gas cylinder is Rs 2,060 nationwide. Both household and commercial users currently pay the same price.

However, the corporation says the cost of importing, transporting and taxing a single cylinder comes to nearly Rs 2,700, resulting in a loss of about Rs 640 per cylinder. Large hotels, restaurants and industries have been buying this subsidized gas and then claiming it as an expense to reclaim value-added tax as well.

Corporation director Binit Mani Upadhyay said this double benefit enjoyed by large businesses will now end. The corporation has brought its groundwork on a dual pricing system and separate cylinders for household and commercial use to the final stage.

The government favors introducing a separate, larger-capacity cylinder for businesses. Industrialists, however, have proposed distinguishing the current 14.2 kg cylinders by color, under which household cylinders would be red and commercial cylinders blue.

The savings from removing the subsidy for businesses will be used to keep household gas prices from rising and to provide additional relief to low-income families.