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NPPA caps prices of medical oxygen and oxygen cylinders

During the covid-19 pandemic, supply of medical oxygen through cylinders has increased from 10% to around 50% of total consumption. (REUTERS)Premium
During the covid-19 pandemic, supply of medical oxygen through cylinders has increased from 10% to around 50% of total consumption. (REUTERS)

  • The ex-factory prices of liquid medical oxygen and oxygen gas cylinders have been capped at 15.22/CUM and 25.71/CUM, respectively
  • The National Pharmaceutical Pricing Authority's move is aimed at stopping black marketing and hoarding of LMOs and oxygen cylinders amid a surge in covid-19 cases

NEW DELHI :

The National Pharmaceutical Pricing Authority (NPPA) has capped the prices of medical oxygen and oxygen cylinders in a bid to stop their black marketing and hoarding due to surging demand amidst covid-19 pandemic.

The NPPA has decided to cap the ex-factory price of liquid medical oxygen (LMO) at manufacturers' end at 15.22/CUM exclusive of GST. And, it has further capped the ex-factory cost of medical oxygen cylinder at fillers' end at 25.71/CUM exclusive of GST in suppression of the existing ceiling price of 17.49/CUM, subject to transportation cost fixation at state level, for six months.

The existing rate contracts of state governments for oxygen purchase, as applicable, shall continue, in consumer interest, the ministry of chemicals and fertilizers said in a statement.

The ex-factory price cap of LMO and oxygen gas cylinders will be applicable to domestic production, the ministry said, adding that the above measures will ensure availability of medical oxygen for consumers at reasonable price both at hospital level and through oxygen cylinders, especially to distant and interior districts.

The present situation of covid-19 has resulted in increased demand of medical oxygen (MO) in the country. Many of the states/Union territories (UTs) are dependent on the medical oxygen supply from other states/UTs. The demand of MO has gone up almost four times, from 750MT a day to 2,800 MT a day, the government said. This has caused strain at all levels in the value chain of production and supply. The manufacturers of MO and fillers have given representation to the government for up to three-fold price increase in the ceiling price of gaseous medical oxygen, said the government.

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 17.49/CUM. However, due to absence of price cap on liquid medical oxygen, manufacturers have hiked prices to fillers. During covid-19 pandemic, supply of medical oxygen through cylinders has increased from 10% to around 50% of total consumption. Price regulation at this end is imperative for 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, government of India.

The Empowered Group 2 recommended NPPA to consider capping the ex-factory price of liquid oxygen and oxygen cylinders in order to ensure their supply at reasonable prices.

To deal effectively with the situation, the ministry of health and family welfare in a letter dated 23 September, conferred the delegation of powers under Section 10(2) (l) of Disaster Management Act, 2005 to NPPA to take all necessary steps to immediately regulate the availability and pricing of LMO and medical oxygen in cylinders.

The Authority deliberated upon the matter in its extraordinary meeting held on Friday.

“It has been decided to invoke extra-ordinary powers in 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 arising due to the pandemic," the ministry of chemicals and fertilizers said in a statement.

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