India supplies LPG cylinders to Bhutan at price which is much cheaper than Indian households pay for subsidized LPG cylinders. The price charged for LPG meant for Bhutan ranged from Rs.362 and Rs.365 per 14.2 kg cylinder depending upon the source of supply. Indian households get 14.2 kg nine cylinders per year at the rate of Rs.410.50 per cylinder.

Most of the petroleum products for Bhutan are supplied by IOCL and in small quantity, by BPCL. In case of LPG, IOCL is the sole supplier to Bhutan who supplied 7,312 MT of LPG during 2012-13 to the land locked nation. IOCL supplies LPG to distributors in Bhutan from Raninagar (West Bengal), Sarpar and Bongaigaon (Assam) depots. IOCL gets the difference between the LPG domestic cost price and the billed price to Bhutan dealers reimbursed by the Ministry of External Affairs. Interestingly, since January 2013, IOCL has not been compensated by the MEA for sale of LPG to Bhutan at subsidized prices.

On the other hand, the difference between the high speed diesel (HSD) cost price and the issue price of the respective supply depot is included in the loss sharing claims lodged by both IOCL and BPCL. The total under recovery claims on the export of HSD made to Bhutan stood at Rs.140.34 crore for the year 2012-13. Total supply of HSD to Bhutan during 2012-13 stood at 103,003 MT of which 60,409 MT was supplied by BPCL and 15,571 MT was supplied by IOC.

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