India is among the leading oxygen producers in the world. It is a medical oxygen exporting country in normal times, the production far exceeding the demand of 700 tonnes per day (TPD). During the first wave of Covid-19 pandemic in 2020, the demand rose four times to 2,800 TPD.

has, however, changed the medical oxygen demand-supply equation, the demand shooting up to 3,842 TPD as on April 12, 2021. The current figure hovers around 5,500 TPD — eight times the pre-pandemic requirements. The supply of oxygen to industries has, therefore, been cut down from April 22, 2021 to meet the medical requirements. Thankfully, the medical oxygen requirement has not gone up at the rate of the infections, as per the data from the Indian Council of Medical Research.

The actual consumption works out to be around 4,000 TPD due to constraints in transport, cylinders, and other management/institutional issues. With the existing producing capacity of 7,500 TPD (including 3,300 TPD diverted from steel and other industries), it should not be difficult to meet the current and even the growing demand for another couple of weeks.

It is, therefore, no surprise that India exported 9,301 MT of oxygen across the world, earning ₹8.9 crore in the 10 months of FY21, compared to only 4,514 MT during the previous financial year, earning ₹5.5 crore. India is credited to have met the oxygen demand of some of the poor countries hit by Covid-19, despite herself being the third worst affected at that time in the world.

The comfortable oxygen situation explains why inter-State movement of medical oxygen has been carried out so far without a well defined regulatory framework. In the past since much of the oxygen produced was consumed by the industry, there was no need to regulate distribution, although the price of medical oxygen is controlled by the National Pharma Pricing Authority (NPPA).

Oxygen producers until now were allowed to sell to industries, hospitals and government agencies under mutual contracts. The role of the Centre and States therefore was a grey area, the whole business being carried through individual contracts.

The present wave of infections has exposed the myth of the country’s self sufficiency in the field. Under the new system, operationalised since mid April 2021, oxygen is being allocated across States, its distribution being monitored by an Empowered Group 2 (EG 2) constituted by the Prime Minister’s Office. The EG 2 has members from all the States and major oxygen producers, the All India Industrial Gases Manufacturers’ Association, Petroleum and Explosives Safety Organisation, the Road Transport Ministry and the Indian Railways. On April 18, the Centre ordered that supply of oxygen to industries, barring a few, should be diverted to the hospitals.

Given the surge in oxygen demand, several States have imposed restrictions over the producers within their territorial jurisdiction. They have directed the companies to meet the local requirements first and build stock for future exigency, before sending it out of the State. They have even attempted to block oxygen tankers, moving out of their States to supply oxygen to hospitals under company’s contract. Some States have even approached the Centre and courts to obtain their quota of oxygen. At least two high courts had to intervene to restore the supply of medical oxygen to the affected States — Maharashtra and Delhi.

Approaching courts

The Delhi government moved the High Court seeking direction against a supplier of liquid medical oxygen (LMO) based in Uttar Pradesh. The company, however, has explained to the Court that the State administration has directed it to meet the local demands first. The same is happening in West Bengal as well. Different ministries and departments of the central and state governments, including the Central Drugs Standard Control Organisation, are trying to resolve the crisis through administrative orders, countered by direct interventions at ground level. Many of these are being challenged in courts, creating enormous confusion in implementation.

The recent tussles involving different State governments over oxygen supplies highlight the decline of governance standards and disregard for the rule of law. It is a matter of grave concern that during a national calamity, State governments are acting so arbitrarily that one has to approach the courts to function, propose airlifting of oxygen or transporting it with armed protection. A further cause of worry is the inability of the Centre to deal with these issues expeditiously.

The current crisis is indeed serious and heartbreaking and the collateral damage caused by mismanagement of oxygen supply, distribution and hoarding is a sad reflection on our ability to manage calamities. Also, it is amazing how certain organisations or civil society groups acquire cylinders and distribute them by assessing needs on their own, based on certification, a responsibility that can best be given to hospitals and doctors monitoring the cases.

A national debate on designing a need based system for distributing life saving items and ensuring appropriate retribution for arbitrary actions by government officials is a must so that such actions are not repeated.

Kundu is a development economist and Sidhu is a private consultant and researcher