Nepal's Gas Paradox: A Crisis Rooted in Reactive Distribution Management

Nepal's gas shortage crisis has resurfaced despite government officials claiming that imports from India remain steady. The Liquefied Petroleum Gas (LPG) market in Nepal faces a paradox, where consumers experience shortages.

The statistics maintained by the Nepal Oil Corporation (NOC) show that during the initial stages of the West Asian conflict in February-March, the corporation supplied 51,192 tonnes of gas. However, LPG supply has remained steady at around 40,000 tonnes per month till June-July.

The root cause of the present instability lies in reactive management of gas distribution. Following the escalation of conflict in West Asia in February, the government implemented a rationing system, limiting sales to half-filled, 7.1 kg cylinders to preserve national stocks. This measure successfully managed demand for several months but created a sudden, overwhelming surge in domestic gas trade when full-cylinder sales were reinstated.

The NOC director has acknowledged that the announcement of full cylinders being available once again caused all previously sidelined empty cylinders to return to the market simultaneously, placing an unbearable strain on the existing distribution infrastructure. This surge was exacerbated by a lack of consumer confidence, leading to panic-driven stockpiling by households and commercial entities.