Policy for Allocation of Oxygen to States of India

  • Here is a simple and comprehensive proposed policy for allocation of Oxygen to the States of India. We need macro-control by the Centre and decentralisation at state level.

“The Supreme Court ordered formation of a National Task Force to streamline oxygen allocation. Earlier it observed that the Centre should consider revisiting its formula which computes the liquid medical oxygen requirement of the states/UTs based on the number of ICU/Non-ICU beds.”

Actually, in normal course medical grade liquid oxygen is freely sold. The Centre has got powers under the Disaster Management Act relating to Covid19, and hence, has assumed power to direct O2 supply from all producers. Business Standard


At the outset it must be made mandatory for all hospitals having more than a pre-determined number of beds (to be decided all-India) to have in-house oxygen plants and within the next six months. Plant size to be decided by local body. The Centre has, under the PM Cares fund, asked for 551 O2 plants to be made in every government hospital in district headquarters. The progress must be monitored by Centre. These should subsequently be run and maintained by the states.


Note that oxygen is a dangerous gas. So, the emphasis has to be on safety.


Here are the contours of a proposed policy that is rational and user friendly:  


1. Quantum of O2 required by a hospital should be based on the number of beds including ICU. It is difficult to estimate demand for oxygen cylinders required at home. So a percentage of local demand, say 5%, may be added to city requirement.


In-house manufacturing capacity of O2 to take care of emergencies. Also PSA Technology vendors should offer Annual Maintenance Contracts to address breakdowns and plant maintenance.


PSA plants to be self-funded. Note that loans to hospitals have become cheaper. The Reserve Bank of India recently announced, “A Rs 50,000 crore emergency health services loans, which can be given by banks till March 31, 2022”. This shall reduce the cost of borrowing for hospitals because such lending being part of priority sector lending means lower interest cost.


2. Lay down rules on oxygen stock levels at a local level. Regular audit to ensure norms are followed. 


3. The stock levels of O2, in terms of number of day’s consumption, should be a function of the lead time. The higher the lead time, the more the stock. Lead time needs to be decided at a local level, based on the time it takes from when an order is placed to delivery at hospital. 


4. Total 02 demand should be collated at a town and district level by state governments. 


5. From the quantum of oxygen determined in 4, reduce 50% of the production capacity of plants set up by hospitals at district level and ones by DRDO amongst others. The balance 50 % is a buffer.

Sardar Patel-Iron Man of India. 

6. State wise O2 requirement for the top 15 consuming states to be annually audited.  


7. If a local body increases the number of beds it must immediately inform the state government and get reflected in the State/UT oxygen demand. 


This is important because of what Mumbai’s Municipal Commissioner I.S. Chahal told the Indian Express, “I told the Delhi government that no hospital should be forced to add beds. The SOS calls from hospitals are because they are forced to increase oxygenated beds overnight, which is not supplemented with oxygen storage.”


8. District and state-wise data of oxygen demand should be uploaded on a site say www.oxygensupplyindia.com i.e. maintained by the Centre.


9. States must also upload O2 quantity produced within their jurisdictions.  


10. Data should be updated every quarter, say 15-20 days before quarter starts. 


11. Health Ministry to review state-wise demand and production. Allocation within states to be decided locally. We need macro control by the Centre and decentralization at state level. Logistical optimization based on linear programming etc would complicate matters.  


Areas of potential shortage to be highlighted to states who would have to import from other states/abroad, increase supplies through the PSA route or incentivise O2 producers to set up plants.  


At all times Centre has to facilitate meeting the shortage even though primary responsibility lies with the states.

There is more to India than the Taj-East. 

12. State wise supply should be mapped to tankers, owned by or made available to states. Where there is shortage states will have to arrange.


13. State governments to maintain Strategic Reserves for O2. Location and quantum of reserve plus all costs therein to be borne by state governments.


Industry sources indicate that one cannot store large quantity of liquid oxygen near cities. It will vaporise in a few days and is hazardous too.


So, it is best to store at steel plants who have 4-5,000 tons of storage capacity. If tankers are kept as stand-by they could be transported by train as is being done currently. States that want to have strategic reserves must be willing to bear the costs.


Let domain experts decide optimal option for reserves.  


14. A way to reduce logistics problems is to lay Gas Pipelines from existing Air Separation Plants (which produces cryogenic and gaseous O2) near cities to hospitals. Industry sources state that 40-50 kms of gas pipeline is possible. Piped gas might be cheaper too.   


Note that towns which are regional health care centres i.e. attract patients from other states or districts for e.g. Delhi/Chandigarh/Varanasi/Vellore/Manipal/Mangalore/Hyderabad/Madurai/Guwahati should keep additional stocks of O2.  


Some policy changes might result in additional cost, but this needs to be borne if we have to save lives.


First published in Financial Express and Here


Also read

1. Interview with Director Inox, Siddharth Jain–Nobody is understanding challenges in supplying oxygen

2. How to Increase Oxygen Supply in India

3. To read all articles on Coronavirus

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