The longstanding LPG rip-off

Have the liquid petroleum gas (LPG) distributors been cheating their clients for years?  A special audit on import and distribution of LPG in the country indicates so.

For 15 years, from 1999 to 2014, consumers were over-charged, through collection of loading and unloading charges, home delivery and depreciation cost, which the distributors included in the final price of the LPG cylinder.  The three distributors have collected Nu 29.11 million in this period.

The audit, on the request of the National Council, found out that, while these costs were covered in the distributors’ commission, distributors have been passing it on to consumers.  That way, distributors could have gained twice at the expense of the consumers.

LPG is widely used in the country because of its convenience.  We have consumers, especially poor farmers, who struggle to have it refilled.  Cash is hard to come by and they put efforts to make the cylinder last as long as they can.  They feel the pinch with the slightest increase in price.

The trade department has responded to the audit’s findings, but the RAA is not convinced and suggested recovering charges levied on services that were never provided.  The RAA has also implicated the department of trade for its failure to protect citizens from unfair business practices and marketplace fraud.

Despite the extra charges, distributors also have been circulating cylinders that are well beyond their life span, thereby risking lives.  Not many would know if the cylinders would have an expiry date, but regulators should be well aware of that.

A lot of credit should be given to the National Council, which smelled that there was something wrong in the business, and directed the RAA to conduct an audit.  The report will be deliberated in the council and we can expect the NC to recommend some actions.

While we cannot see each consumer getting refunded the extra price they were charged, consumers would want authorities to do justice to what had transpired for more than a decade.  They would want accountability fixed and government to recover the millions of ngultrums that were not theirs.  Distributing LPG is already a lucrative business.  Consumers have no choice but to buy from them.

What is more intriguing is that trade officials had not detected this for more than a decade, going by the audit report.  The business could be complex, but ensuring that cylinders are disposed after their expiry date is not.

While we wait for the recommendations of the council, it is important to make the business transparent.  The trade department should sensitise people on important things, like insisting on new cylinders, if they are given an expired one.  This could save lives and property.

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