What is the cost of transporting medical oxygen? Karnataka asks transport commissioner

The Karnataka government has asked Transport Commissioner N Shivakumar to submit a report as soon as possible on the cost incurred by oxygen suppliers in transporting medical oxygen from their manufacturing facilities to hospital clients.

The move comes three weeks after the gazette notification of National Pharmaceutical and Pricing Authority (NPAA) that clearly states, "The state government is required to fix the transport charges under the Disaster Management Act."

Transport Commissioner N Shivakumar confirmed to DH that the government had sent a letter to this effect a few days back. He said, "A three-member panel has been formed but due to the transfer of an additional commissioner, we have to find a replacement member in the panel. We will be taking into account operational costs of suppliers and fixing transport costs like we have done, for autos, busses etc."

On transportation, the gazette notification had maintained that "in order to meet the enhanced requirement, medical oxygen is being supplied to remote areas of the country, after incurring additional cost on transportation. Due to the ongoing Covid-19 pandemic, these extraordinary situations have caused strain at all levels, in the value chain of production and supply, especially for distant and interior districts based on terrain and distance."

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On operational viability, oxygen suppliers have pointed out that various factors like distance from source and type of equipment installed affect the cost of delivering liquid medical oxygen from the manufacturing location to the hospital premises. Suppliers say they have seen an exorbitant increase in transportation cost due to a surge in medical oxygen demand.

The 'operational costs' that the transport department has to include are the cost of sourcing products from far-off manufacturing facilities, transit loss, decantation loss, sanitisation and hygiene compliance requirements at all manufacturing locations, drivers, tankers, plants and plant facilities, maintenance and additional manpower costs, driver incentives and support for Covid-19 pandemic, and implementation of social distancing norms at all locations.

If the transport cost does not factor in these operational costs, suppliers will be forced to recover these additional costs from customers, that is, their hospital clients.