This story is from July 14, 2020

Rising costs leave oxygen makers panting, yet to choke hospitals

Rising costs leave oxygen makers panting, yet to choke hospitals
Nagpur: Covid outbreak has also left the medical oxygen makers panting due to rising overheads. There is no dearth of the product, but units engaged in making the gas are facing tough times due to rising costs.
Apart from hospitals, the gas is also used in industries. As industrial activity was at a low, the demand had come down to negligible levels from March to May.
The units, however, were kept operational to meet the hospital demand. The units ran at losses from March to May as catering to the hospitals was not enough to recover the cost of operating the entire set up.
Even as the industrial demand has picked up, it is not enough, said sources in the gas making business. There has been a marked increase in the overheads too. The major input cost goes towards electricity bill and fuel. Over the period of time these overheads have gone up by 10% and 25% respectively, hitting the margins.
“Finally the margins are being affected and the industry is planning to seek a rate revision from hospitals. It is not that a rate hike will be imposed soon, but the manufacturers have certainly begun negotiations,” said an oxygen maker requesting anonymity.
If the manufacturers are looking forward to negotiate a rate hike, hospitals said they were in a comfortable position. Actually, the demand for oxygen has dipped due general reduction in admissions, they said.
Dr Anup Marar, director of Orange City Hospital and Research Institute (OCHRI), said , “Already 80% of the beds have been reserved for non-Covid management in all private hospital but Covid patients too are not many in the private set ups.”

Dr Milind Fulpatil, officer in special duty (OSD) for the government’s Superspecialty Hospital (SSH), said a private agency supplied oxygen to them and there was no problem in procurement. The superintendent of Indira Gandhi Government Medical College and Hospital (IGGMCH), Dr Sagar Pandey, also confirmed there was no shortage of oxygen.
There are a handful oxygen makers in the city. Those engaged in providing oxygen cylinders buy it in liquid form from a larger unit.
A source in one of the units said, “We have already implemented a minor increase in price for some hospitals but there is scope of further increase. If the hospitals don’t agree, we may have to pass the burden on industries.”
The rate of oxygen is fixed by the government. It comes to Rs 18 per cubic metre of gas. This is the upper ceiling or the MRP. “So far, the rates have been within the upper limit. The manufacturers are now asking for a hike, of course within permissible limits,” said a source in a cylinder supplying company. The rates are different for each hospital depending on the location as the transportation expenses are recovered too, he said.
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