Kathmandu — In the country, the need for storage facilities is only felt when there is a gas shortage and consumers are forced to queue. On the other hand, since gas imports depend on Indian gas bullets (tankers), at times the import operations of certain companies are affected. Due to reliance on Indian bullets, Nepal has been paying around Rs 6 billion annually to India for transportation.
It is not that Nepali industrialists have not purchased bullets for gas imports. However, they say that even after buying gas bullets as per government decisions, they were forced to sell them at a loss. According to a notice issued by the Nepal Oil Corporation in mid-September to mid-October 2015, businesses were allowed to purchase 775 bullets. Through the budget of 2016/17, the government also provided a two-thirds customs duty exemption on bullets.
Dharma Raj Bartaula, who purchased 21 bullets with government approval, complained that he had to sell them at a loss without even being able to use them. He said that although they bought the bullets after receiving permission to operate tankers from the corporation, it resulted in losses instead. “After getting approval from the Oil Corporation, we even placed an order to manufacture 21 bullets in India,” he said. “But India did not provide an explosives license. Without that, our bullets could not be operated in India.”
During a visit to India by then Prime Minister Sher Bahadur Deuba in mid-August to mid-September 2017, the issue of licensing Nepali gas bullets was raised, but nothing materialized.
Bartaula says that although each bullet was purchased for INR 1.75 million, he was forced to sell them for just INR 300,000 after being unable to use them. “The government did lobby with the Indian government for the explosives license,” he said. “But it wasn’t enough, and many entrepreneurs like me suffered losses.”
He also shared that the vehicle chassis had to be sold off in a similar way. According to him, he incurred a loss of around NPR 7 million per unit (including both the vehicle and the bullet). “I had ordered 21 vehicles and the same number of bullets to be manufactured in India. Around Rs 150–160 million was wasted, I had to pay interest, and everything was lost,” he said.
Due to India not providing the required “explosives certificate” for operating the bullets, transportation using those bullets could not take place. Ultimately, the entrepreneurs sold those bullets in India at a loss.
Business owners say they failed to obtain the certificate because the Nepal government did not make sufficient efforts. As a result, Nepali industrialists are still dependent on Indian bullets for gas imports.
Shiva Ghimire, former president of the Nepal LP Gas Industry Association, said that two bullets he had brought for trial are still lying unused. “We had received permission for 775 bullets, out of which more than 100 were manufactured, with an investment exceeding Rs 5 billion,” he said. “We sold the bullets there (in India). Some vehicles were also sold, while others have been converted into trucks and are being used.”
He argues that if gas were supplied through pipelines and properly stored in the country, the recurring shortages would not occur. Since industrialists continuously import and sell gas, there is no stockpile, he said. Although the corporation has talked about building gas pipelines and storage facilities, it has not prioritized them.
After the petroleum pipeline from Motihari, India, to Amlekhgunj, Nepal, came into operation on September 10, 2019, the corporation stated that transportation became easier and technical losses decreased. The corporation itself had long argued that a pipeline was necessary since gas is transported through Indian bullets.
Accordingly, the corporation had moved forward with plans for the Motihari–Pathlaiya (Sarlahi) LPG gas pipeline. Although the Indian Oil Corporation (IOC) conducted a route survey for the gas pipeline and submitted its report about two years ago, further progress on the project has not yet been made.
Pradeep Kumar Yadav, chief engineer at the Aviation Fuel Depot in Sinamangal, says that although the route survey was completed with investment from the Indian Oil Corporation (IOC), further work has not moved ahead.
According to Yadav—who has also served as the project chief of the Motihari–Sarlahi gas pipeline expansion—the Nepal Oil Corporation’s management and the Ministry of Industry have neglected the gas pipeline project. As a result, Nepal continues to pay around Rs 6 billion annually to India in transportation fees.
He claims that even though IOC had shown interest in investing in both the gas pipeline and storage facilities, the Nepal Oil Corporation itself failed to prioritize and advance the project.
A gas pipeline of about 130 kilometers needs to be constructed from Motihari in India to Pathlaiya–Sarlahi in Nepal. There was also a plan to build a gas storage facility with a capacity of 10,000 tons in Sarlahi. Yadav said that the Nepal Oil Corporation has allocated Rs 50 million in the current fiscal year’s budget for the pipeline and storage facility.
Stakeholders say the gas pipeline has not been prioritized because the country currently has sufficient electricity production. However, Yadav noted that due to the lack of reliable and quality electricity, consumers in the Kathmandu Valley have not been able to shift to electric stoves, and it may take another 10–15 years.
According to the route survey conducted by the Indian Oil Corporation (IOC), the estimated cost for constructing the pipeline and storage facility is around Rs 15–20 billion. However, a Detailed Project Report (DPR) has not yet been prepared. The corporation owns 16 bighas of land in Sarlahi for the project.
In mid-November to mid-December 2024, during a visit to India, then Minister for Industry Damodar Bhandari proposed that since fuel cannot be immediately replaced, a pipeline is necessary to ensure smooth storage and supply, and requested that it be constructed with grant support.
Kantipur
