- Desperate Indians are turning to a black market in oxygen as stocks dwindle amid a COVID-19 surge.
- Oxygen shortages have taken hold in several countries, with rampant price-gouging.
- Reports from around the world detail cylinders being sold for ten times their normal price.
- See more stories on Insider’s business page.
India is having to deal with a black market for oxygen amidst a record-breaking COVID-19 surge that has exhausted supplies in many hospitals.
It is a trend that has been seen in many countries around the world during the COVID-19 pandemic.
Six hospitals in India said Thursday that hey had run out of medical oxygen, one of the most important treatments for those struggling with COVID-19 symptoms.
Demand for oxygen is likely to shoot up in coming days in twelve states in India as the country continues to report hundreds of thousands of new cases each day, the Indian Express reported.
The Times of India reported Thursday that the average cost of an oxygen cylinder has “skyrocketed”, to 20,000 to 25,000 rupees, about $250-330.
One man in India told AFP that he paid 45,000 rupees, about $600, for a cylinder of oxygen. That is about nine times its normal price, AFP reported on Thursday.
One advertisement circulated on social media offering a cylinder for 30,000 rupees, about $400. Another offered it for 35,000, about $460, the Times of India reported.
According to World Bank data, the Gross National Income per capita in India is $2,120 per year.
India is not alone in facing this issue. 25 countries around the world are reporting a surge in demand for oxygen, mostly in Africa, the World Health Organization (WHO) said.
More than half a million COVID-19 patients need oxygen treatment every day, per WHO estimates. That means 1.1 million oxygen cylinders every day.
Brazil, Mexico, Peru, Egypt, Nigeria and other countries all reported shortages at the height of COVID-19 surges, and many had to deal with black markets praying on the vulnerable.
In Peru last year, the price of a cylinder of oxygen was pushed well over $1,000, The Guardian reported.
One woman reported paying nearly $1,300 for a cylinder, a markup of 1,000%, The Washington Post said on June 18, 2020.
In Mexico too a black market thrived amid a nationwide shortage, with demand up sevenfold, The New York Times reported. Trucks transporting oxygen were held up at gunpoint, according to local reports, and prices for oxygen tripled on the black market, The Times reported on February 9.
At the height of the shortage crisis in Brazil’s Manaus region in January, the price of a 50-liter oxygen container went up 6.5 times, to almost $1,200, France 24 reported.
Oxygen shipments were guarded by police. Some sellers were caught painting fire hydrants green to pass them off as containers, France 24 reported on March 19.
Black markets aren’t the only reason for a price hike. Transportation and infrastructure also contribute to the increase.
Oxygen is often produced by factories, and transported by cooled tankers over long distances. In richer countries, the oxygen is taken in liquid form by cooled tankers to the hospitals. This means the oxygen, which takes less space in liquid form, is cheaper to transport.
But most hospitals in poorer countries around the world don’t have this sort of infrastructure. They have to rely on the transport of heavy gas metal cylinders over long distances to reach the hospital. That incurs logistical and transport costs, passed on to the patient, according to a Medium post by Craig Spencer, a medical professor in New York and a board member of Doctors Without Borders.
Small rural hospitals in Kenya and Nigeria, pay 5 to 10 times more for a cylinder of oxygen than a London hospital does, according to an investigation from the UK’s Bureau of Investigative Journalism.
According to The Times, at the height of the oxygen shortage in Mexico, a cylinder of oxygen cost more than $800, up to 10 times the cost paid by a US hospital.
Most states in India have redirected their oxygen production, which is used for instance in the iron, steel and glass industry, towards meeting the oxygen need, the Indian Express reported.
But here, again, the problem is transport, and India is huge. Oxygen production is mostly done in eastern India, whereas the demand for oxygen is higher in the western part of India and other parts, The Economic Times has reported.
Because of the increased logistics and transport, the cost of refilling a cylinder in India has been hiked fivefold, from about $1-5 to $6 to $26, The Indian Express reported.
India’s police has been cracking down on the black market for oxygen. The government of the Uttar Pradesh state of India has said it would invoke the National Security Act and Gangster Act to combat black marketing of oxygen, All India Radio News said in a tweet on Thursday.
India plans to import 50,000 metric tonnes of medical oxygen to deal with the crisis, the Indian Express reported. It also set up an “Oxygen Express” train to get supplies to hard-hit states.
Some experts blame the government for not putting the infrastructure in place to avoid this situation in the first place. “We were aware that the second wave was coming but we didn’t plan to avoid unfortunate incidences like shortages of drugs, beds and oxygen,” epidemiologist Dr Lalit Kant told the BBC.
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