Capping Medical Oxygen Prices: Kerala High Court Directs State To Speed Up Process Of Fixing Transportation Cost

The Kerala High Court on Wednesday directed the State Government to expedite the process initiated to fix the transportation cost of Liquid Medical Oxygen and Oxygen Inhalation in cylinders. 

Justice PB Suresh Kumar while hearing a matter further directed the State to devise a mechanism in the meanwhile to ensure compliance with the order of the Ministry of Chemical and Fertilizers fixing the price for medical oxygen.

The said interim order was passed in a writ petition filed by Kerala Private Hospitals Association seeking steps to prevent an increase in oxygen price. 

The Ministry of Chemicals and Fertilizers had on 25th September 2020 issued an order prescribing the maximum price (ex-factory) exclusive of GST for Liquid Medical Oxygen as Rs.15.22 per cubic meter and Oxygen Inhalation(Medicinal Gas) in cylinder as 25.71 per cubic meter. Such an order was issued considering the extraordinary circumstances prevailing in the country on account of the spread of Covid-19 pandemic.

The primary contention of the petitioners was that the State failed to enforce the said order, thereby putting hospitals and patients who need oxygen support for Covid-19 treatment in irreparable hardship. Advocate K Anand appeared on behalf of the petitioners. 

As a result, the petitioners approached the Court seeking directions to the respondents to take necessary steps to prevent the oxygen suppliers to hospitals in the State from increasing the price of oxygen during the pandemic.

It was submitted that increasing the price of oxygen cylinders after the government has fixed the price for Covid-19 treatment would affect the operation of hospitals.

Government Pleader pointed out that there are no regulatory mechanisms in the State for effective implementation of the said order. Similarly, the State submitted that without fixing the transportation cost, which can be charged by the manufacturer/supplier of oxygen, the order cannot be effectively implemented.

Accordingly, the State submitted that it had already constituted a committee consisting of Drugs Controller, Controller of Legal Metrology Department, a representative of Petroleum and Explosives Safety Organization (PESO), and the General Manager of the Kerala Medical Services Corporation (KMSCL) to decide the transportation cost chargeable by the manufacturer/supplier, and to monitor the effective implementation of the orders issued.

The Court agreed with the State's submission that the prices of Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in cylinder could be controlled effectively, only if the transportation cost is fixed.

"In the circumstances, the State Government is directed to expedite the process initiated for fixing the transportation cost of Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in the cylinder. There will also be a direction to the State Government to devise a mechanism in the meanwhile and ensure compliance of the order", the Bench held. 

The matter has been listed after 2 weeks. The respondents have been asked to file a statement in the meanwhile indicating the steps taken for compliance with the directions aforesaid.

Case Title: Kerala Private Hospitals Association v. State of Kerala 

Click Here To Download The Order