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NPPA caps price of liquid medical oxygen and medical oxygen cylinders

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

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The Ministry of Health & Family Welfare (MOH&FW), GOI has vide its letter dated 23.09.2020 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 cylinder.

The Authority deliberated upon the matter in its meeting held on September 25, 2020, and 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. 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 the suppression of 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 be applicable to domestic production.

The steps were taken after it came to the notice of the government that due to absence of price cap on liquid medical oxygen, manufacturers have hiked prices to fillers.

“The above measures will ensure availability of medical oxygen at consumer end at a reasonable price both at hospital level and through oxygen cylinders, especially to distant and interior districts”, informed a release from the Ministry of Health & Family Welfare.

Speaking to Usha Sharma from Express Pharma, Narendra Ahooja, State Drug Controller, Haryana, commented, “This was required and flagged by the FDA Haryana during discussions at various platforms, webinars etc. and NPPA has done this using extraordinary powers in a pandemic situation. This will definitely help in;
  1. Maintaining availability and smooth supply chain of medical oxygen in cylinders.
  2. Medical oxygen refillers will not resort to hoarding or black marketing
  3. No one can ask for excessive charges in name of transportation
  4. The tendency to divert liquid oxygen to industrial oxygen will reduce as now this notification has taken care of medical oxygen refillers
  5. Hospitals will install liquid oxygen tanks due to difference of price of liquid medical oxygen and oxygen IP medical oxygen in cylinders
  6. Hospitals will not be able to charge more for medical oxygen from patients

(Source: PIB)

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