Upper House discuss distribution of LPG and SKO

The Economic Affairs Committee (EAC) of the National Council said the lack of a proper legal framework and coordination among the concerned bodies has led to discrepancies on import and distribution of Petroleum Oil Lubricants (POL) products in the country. The committee presented such major issues while discussing the special audit report on import and distribution of Liquefied Petroleum Gas (LPG) and Superior Kerosene Oil (SKO) in the House yesterday.

NC said there is need for a proper legal and policy framework for better coordination between Department of Trade and Department of Revenue and Customs, in maintenance of basic data on the import and distribution of POL products.

The House also discussed on whether the audit report would be submitted to Public Accounts Committee for further review, and to report the results of its deliberations to the Parliament.

EAC also put forth its recommendation on the audit report findings on shortcomings and inadequacies in the operation of POL products in the country.

Fixation of POL prices without basis and transparency, Royal Audit Authority’s recoverable amount of Nu 186.27mn from home delivery charges and depreciation cost that was unfairly levied on consumers were also discussed. EAC also recommended that the calculation of dealers’ commission for Bhutanese POL distributors be taken into account.

Depot surcharges being charged on consumers was not found justified, as pointed out by EAC.  NC’s Eminent Member, Karma Damcho Nidup, said the fund can be used in other development activities since it is owned by government, therefore, it should kept as usual with only a change in the name required.

Eminent Member, Dasho Karma Yezer Reydi, said that as per the Indian Oil Corporation Limited, dealers have to pay 12.66 percent of service tax.  He asked whether such tax has been included for dealers in Bhutan.

Among other recommendations was the need for a proper review of SKO being sold at subsidized rates to Indian communities and business units in border towns.

NC member of Pemagatshel, Jigme Rinzin, said that the LPG cylinders in Bhutan are priced 10 percent to 15 percent extra as compared to India, and asked for reasons behind the pricing policy.

The House also discussed the lifespan of the LPG cylinder and its expiration date, the need for replacement of the cylinders, importing subsidized LPG and SKO quotas, and reaching the service to the rural areas.

The House asked EAC to come up with its recommendations for the final deliberation to be carried out in the coming week.

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