Medical oxygen: Centre puts price caps after shortage reports

In order to deal with shortage of medical oxygen and the resultant increase in prices in the country, the National Pharmaceuticals Pricing Authority (NPPA) has put a cap on the ex-factory price of liquid medical oxygen (LMO) and filled cylinders for six months.

It has also instructed the states to fix transport costs for the supply of medical oxygen to address COVID-19 exigencies.

The ex-factory price of LMO at the manufacturers' end has been capped at Rs 15.22 per cubic metre, exclusive of GST, while the ex-factory cost of a medical oxygen cylinder has been capped at the fillers' end at Rs 25.71 per cubic metre, exclusive of GST, as against the existing ceiling price of Rs 17.49 per cubic metre.

However, it is subject to the transportation cost fixation at the state level.

The move by the NPPA comes after a three-fold increase in the price of medical oxygen gas.

The authority said that the demand for medical oxygen had gone up almost four times, from 750MT/day to 2,800 MT/day. Besides, delivery through cylinders has increased from 11% pre-COVID to 50% of current oxygen supply, leading to an exponential rise in prices.

"This has caused a strain at all levels in the value chain of production and supply, especially for distant and interior districts based on terrain and distance."

The manufacturers of medical oxygen and fillers had represented to the government for up to a threefold price increase in the ceiling price of gaseous medical oxygen.

"It is, therefore, imperative to cap the price of LMO to ensure uninterrupted availability of medical oxygen through cylinders to the hospitals and consumers," the organisation said.

The NPPA said that use of oxygen for medical purposes from the overall production has also significantly increased. "Currently, during the COVID-19 pandemic, around 50% of the total liquid oxygen production is used for medical purposes in comparison with around 15% usage during the pre-COVID period. Liquid oxygen is being diverted from industrial use to medical use to cope with the additional demand. Many states/UTs are dependent on the medical oxygen supply from other states/UTs. To meet the enhanced requirement, medical oxygen is being supplied to remote areas of the country after incurring additional cost on transportation," it added.