Trade department warns businesses to switch to commercial LPG, again

Random inspections, a Nu 10,000 fine, seizure of security deposits and cylinders, cancellation of business license, are some of the measures being announced 

Fuel: Hotels, restaurants, and canteens across the country have 18 days from today to surrender their subsidised Liquid Petroleum Gas (LPG) cylinders they are currently using for commercial purposes. These establishments will have to switch to commercial LPG supplied by Bhutan Industrial Gas (BIG) from October 26.

Despite repeated warnings, commercial establishments across the country are still opting for subsidised LPG cylinders rather than the commercial BIG cylinders, the trade department has announced.

The move follows the trade department finding many commercial establishments still using subsidised LPG despite repeated notices. Trade officials also said the root cause of subsidised LPG shortage in Thimphu was mainly because some hotels were still stockpiling and using numerous subsidised LPG cylinders for commercial activity.

It was found that subsidised LPG was being misused most in Thimphu.

According to figures shared by trade officials in Thimphu, there are about 447 establishments that are yet to switch to commercial gas, while there were 330 establishments that have switched to commercial gas.

In a letter circulated to hotels and restaurants across the country, the trade department has promised ad-hoc inspections in all hotels, restaurants, and canteens after October 26. Should they find the businesses still using subsidised gas, the cylinders will be seized and the users penalised Nu 10,000.

The trade department will also seize the security deposit and price of the cylinder. Subsequent offences will lead to cancellation of business licenses.

Trade officiating director, Dophu Tshering, said the intention was to ensure the actual beneficiaries use the subsidised gas, not the commercial entities.

“Commercial entities must use commercial gas,” the director said, adding that it would be incorrect if it were otherwise. “Quota would be going indirectly to others.”

The director also said the trade department would be more strict from October 26. He said the department had taken a relaxed approach until now.

During monitoring, trade officials had also found that hotels and restaurants in Thimphu were using several subsidised LPG cylinders connected with pipes but hidden away from view. They also found that many successful hotels were suspiciously purchasing only one BIG cylinder a month.

Commercial LPG was introduced in 2012. Until October 2013, BIG cylinders were distributed only in Thimphu, Chukha, and Paro. Other dzongkhags were introduced to the commercial LPG in October 2013.

M/s Bhutan Industrial Gas is the only dealer for the commercial LPG cylinders in Bhutan.

A filled BIG cylinder weighs 19kg, costs more than Nu 2,000 per cylinder depending on the location.

Hoteliers across the country had complained that the price of the commercial cylinder, is too high for just 5kgs more than the subsidised ones. Hoteliers argue this is an increase of 400 percent in price.

As a result, there are many potential customers still using the subsidised 14.2kg cylinders. There were hotels and restaurants hoarding up to 90 cylinders, which was causing shortages, especially in Thimphu.

Dophu Tshering said LPG depots now transport two truckloads of subsidised gas cylinders to Thimphu in a day with a truck each carrying 400-450 cylinders. Earlier, the distributors brought only a truckload of 350 cylinders a day.

“This is also because the people are concentrating more at BOD,” the trade director said, adding the public also should purchase from Druk Petroleum Corporation Limited (DPCL) and Damchen depots.

A subsidised LPG cylinder costs Nu 503 in Thimphu.

At present, Bhutan has a quota to import 700MT LPG gas from India in a month on a subsidised rate.

Rajesh Rai, Phuentsholing

1 reply
  1. Drukdra Drukpa
    Drukdra Drukpa says:

    Whats happening at the moment?
    The hotels, canteens and restaurants across the country are switching for subsidized LPG instead of the commercial LPG. Why? They buy one commercial LPG only to show whenever there is inspection by the Department of trade.

    1. Not all hotels, canteens and restaurants have that same capacity to earn due to their size, nature of business and location

    2. Two subsidized LPG is far better than one commercial LPG

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