NPPA to cap price of liquid medical oxygen & medical oxygen cylinders

Empowered Group 2 sends recommendation to ensure a reasonable price

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NPPA
Medical oxygen. Photo - Indiamart via internet

The present situation of Covid-19 has resulted in increased demand for Medical Oxygen (MO) in the country, and hence its availability is of utmost importance. Many of the States/UTs are dependent on the medical oxygen supply from other States/UTs.

The government is committed to an uninterrupted supply of medical oxygen, especially in the times of pandemic. Oxygen Inhalation (Medicinal Gas) is a scheduled formulation, covered under the National List of Essential Medicines (NLEM). Its existing ceiling price fixed by NPPA is Rs 17.49/CUM. However, due to the absence of a price cap on liquid medical oxygen, manufacturers have hiked prices to fillers. During Covid, the supply of medical oxygen through cylinders has increased. At this end, price regulation is imperative for the continued availability of medical oxygen across the country.

The issue related to availability, including pricing of oxygen, has been under the continued consideration of Empowered Group 2, GOI. The Empowered Group 2 has recommended NPPA to consider capping the ex-factory price of liquid oxygen to ensure its supply to fillers at reasonable prices. It has also requested NPPA to consider a cap for the ex-factory price of oxygen in cylinders to ensure the supply of oxygen cylinders from filler at reasonable prices.

To deal effectively with the situation, the Ministry of Health & Family Welfare (MOH&FW), GOI has, vide its letter dated 23 September 2020, conferred the delegation of powers under Section 10(2) (l) of the Disaster Management Act, 2005 to NPPA to take all necessary steps to immediately regulate the availability and pricing of LMO and Medical Oxygen in the cylinder.

The Authority deliberated upon the matter in its extraordinary meeting held on 25 September 2020. It has been decided to invoke extraordinary powers in the public interest, under Para 19 of DPCO, 13 and under Section 10(20) (l) of Disaster Management Act, 2005 to deal with the emergent situation the pandemic. Accordingly, it has been decided:

  • To cap the ex-factory price of Liquid Medical Oxygen (LMO) at manufacturers end at Rs 15.22/CUM exclusive of GST; and
  • To further cap the ex-factory cost of Medical Oxygen Cylinder at filler end at Rs 25.71/CUM exclusive of GST in suppressing the existing Ceiling Price of Rs 17.49/CUM, subject to transportation cost fixation at the state level, for six months.

The existing rate contracts of state governments for oxygen purchase, as applicable, shall continue, in consumer interest.

The ex-factory price cap of LMO and oxygen gas cylinders will apply to domestic production.

According to the press statement, the above measures will ensure medical oxygen availability at consumers end at a reasonable price both at the hospital level and through oxygen cylinders, especially to distant and interior districts.

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