Centre fixes price caps for medical oxygen as demand surges amid COVID-19 pandemic

NEW DELHI: Amid reports of shortage and hoarding of medical oxygen -- which is crucial for the treatment of critically ill COVID-19 patients -- the Centre on Saturday fixed price caps on it for the next six months.

As per a notification issued by the National Pharmaceutical Pricing Authority, medical oxygen’s price has been fixed at Rs 15.22 per cubic metre (exclusive of GST) at the manufacturers’ end and Rs 25.71 per cubic metre at the filler's end, subject to transportation costs fixed at the state level.

The development comes as the demand for medical oxygen has gone up almost four times -- from 750 MT per day to 2800 MT -- in the wake of the pandemic.

“This has caused a strain at all levels in the value chain of production and supply,” said the government in a statement.

The manufacturers of medical oxygen and fillers have made representations to the government for up to three-fold price increase in the ceiling price of gaseous medical oxygen, it said.

The Centre also said that the decision was being taken by the NPPA following the recommendations of an expert committee and the Union Ministry of Health and Family Welfare under the Disaster Management Act, 2005 given the extraordinary circumstances.

As per the latest notification, the existing rate of contracts of state governments for oxygen purchase will continue in consumers’ interest and the ex-factory price cap of LMO and oxygen gas cylinders will be applicable only to domestic production.

“These measures will ensure availability of medical oxygen at the consumers' end at reasonable prices both at hospital level and through oxygen cylinders, especially to distant and interior districts,” said the NPPA.

The new intervention by the Centre comes days after it suggested that some states are restricting manufacturing units in their territory from supplying medical oxygen to other states. The Centre also put the onus on states to ensure oxygen availability for needy COVID-19 patients.

This could be creating an oxygen shortage in several places, said the government.