Supplier unable to meet demand due to financial issues

Phub Dem

It has been more than a month since Paro and other eastern dzongkhags ran out of commercial liquefied petroleum gas (LPG).

Hotels that cater as quarantine centres in Paro had faced challenges, as they had to use borrowed subsidised and non-subsidised gas.

The procurement officer of Hotel Olathang, which is used as a quarantine centre, said that it had been more than a month since the hotel last received the commercial LPG.

He said that it was difficult to cater for lots of guests using subsidised LPG, which finishes in a day. “To avail subsidised LPG refill, we need to have a card, and the price of LPG is increasing by the day.”

Another hotel owner said that trade officials impose heavy fines if they catch hotels using domestic LPG, but they did not monitor when the regions were running short of commercial LPG for months.

With the introduction of commercial gas cylinders in 2017, hoteliers and restaurateurs surrendered their domestic LPG cylinders and switched to the commercial cylinder.

However, with no commercial LPG supply in the region, restaurant owners and hoteliers have been using green gas (non-subsidised) for their businesses.

The supplier of commercial gas in Paro, Jigme, said that he ran out of stock beginning February 5.  He said that he had been receiving numerous calls and had collected multiple empty cylinders. “Customers are pressuring me and there are lots of issues.”

He said that he even complained about the issue to DoT but received no response so far. “Orders from the dzongkhag, quarantine centres, and other eateries are pending due to Paro tsechu.”

According to Bhutan Industrial Gas’s (BIG) general manager, Sonam Tenzin, the agent was unable to supply to the eastern and central parts of the country due to financial issues.

He said Paro would receive its stock today and the delay in supply was due to Covid-19 protocol while transporting the LPG.

The general manager said commercial LPG demand in eastern Bhutan dropped due to a limited customer and hotel and restaurants closures because of the pandemic.

He said that the sale reduced by 90 percent, costing the company a considerable loss.

The company also wrote to the Ministry of Economic Affairs in October last year requesting to increase the selling rate and dealer commission due to the impact of Covid-19.

It states that the company couldn’t pick the quota before the Covid-19 pandemic due to less demand and commercial entities illegally using domestic LPG. “Due to the pandemic, were not able to lift the 100MT quota.”

With a continuous drop in sales, it was difficult for the company to sustain, especially in Samdrupjongkhar and Gelephu, with an average sale volume of one truckload in three months.

Besides, the increase in loading, unloading, transhipment, transportation, MDP and customs fees have further worsened the situation.

The department fixes the operational cost of LPG agents, such as transportation, loading and unloading.

Sonam Tenzin said, with a considerable expenditure, it had been more than a year the company ran at a loss.

An official with BIG said that the agent sold about eight truckloads of commercial LPG during Paro tsechu, but now it was difficult to sell even a truckload in a month.

She said that the company was out of budget and it was difficult to supply LPG.

Meanwhile, the Department of Trade’s officiating director Rinchen Lhazom said that a committee was reviewing the justification submitted by the private firm, as it directly impacts consumers.

She said the committee was reviewing the price and was expecting an outcome by the end of April.