State Trading Corporation of Bhutan Limited (STCBL) will now distribute 200 metric tonnes (MT) of liquified petroleum gas (LPG) to consumers.
This is to maintain uninterrupted supply and distribution of LPG in the country, according to trade officials.
The distribution would begin once the construction of Ramtokto and Dechencholing petroleum, oil and lubricants (POL) outlets in Thimphu are completed. STCBL will establish 10 other outlets in the country.
Department of Trade approved STCBL’s proposal to allow them to distribute LPG December 2018.
The decision to award the distribution to STCBL, according to trade director Sonam Tenzin was to encourage competition to improve delivery services and not to limit POL services to dealers.
He also said there was no application from the private sector to venture into the business. “It was STCBL who proposed for the distribution of POL services.”
Economic affairs minister, Loknath Sharma, said the ministry was not trying to undermine the private sector but except for Tashi Commercial, other POL depots could not pick up the business well. “It will be difficult for private entities to enter into POL business because of high capital requirements and low-profit margin. LPG’s distribution is more of moral responsibility than business.”
Meanwhile, the ministry also deferred its decision to lift subsidised LPG cylinders from four thromdes after the stakeholders’ meeting with regional directors, regional trade and industry officers and dealers of POL on December 12 last year.
While a discussion was held to resolve the shortages and to discuss the operational plans and strategies to lift subsidised LPG from the thromdes, dealers reported that stock position of subsidised LPG was adequate following the increase in quota from 700 metric tonnes (MT) to 1000MT per month.
Lyonpo Loknath Sharma also reasoned that urban poor should also get subsidised cylinders.
Although the ministry has data on urban poor compiled by thromdes and National Statistics Bureau, the authorities said the data on urban poor was not credible.
Trade director said that as per the data, the urban poor were less than 300 households from four thromdes.
“The data on urban poor could not be verified,” Lyonpo Loknath Sharma said.
Lyonpo said that the notification would have been implemented if the contingency plan to increase subsidised from 700 to 1000 did not come through. “Now we have some time to plan distribution between urban and rural conveniently, open additional outlet, and if required increase distributors as well.”
DoT issued a notification in July last year stating that the supply of subsidised LPG cylinders will be lifted from the four thromdes of Thimphu, Gelephu, Phuntsholing, and Samdrup Jongkhar with effect from January 2020.
The move was to address LPG shortage by promoting the use of non-subsidised LPG among urban consumers and to divert subsidised LPG to rural and underprivileged consumers.
Trade officials also said dealers claimed they are having difficulty in selling non-subsidised LPG cylinders because of less demand from the public in four thromdes due to availability of subsidised LPG.
The dealers were asked to circulate adequate numbers of new cylinders and to open separate counter for subsidised and non-subsidised LPG in all depots to reduce queuing time.
Sonam Tenzin said dealers would have to deliver service from nine in the morning to five in the evening without lunch break.
He also said that the concerned regional offices were asked to monitor the shortage of LPG in rural areas and appoint gewog LPG agents if required in all gewogs. “We already gave a few licences to gewog LPG agents. And we encourage more to come forward. ”