NOC pushes for price hike

REPUBLICA

KATHMANDU, Feb 24: Nepal Oil Corporation (NOC) on Wednesday requested the government to either adjust prices of major petroleum products or provide it a fund of Rs 500 million in order to pay the Indian supplier and resume normal imports.

NOC Chief Digambar Jha on the day met with Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari and informed the latter that the corporation was facing problem in maintaining normal import, particularly as its loss jumped to Rs 1.13 billion a month in February.

“Indian Oil Corporation (IOC) -- the sole supplier -- too has started curtailing supplies, citing inadequate payment. Unless we are granted sources to generate fund -- either through price hike or direct cash support, we won´t be able to manage supplies,” Jha told Adhikari.

NOC´s loss soared mainly as the government has consistently deferred price hike since the last couple of months event though crude prices have been rising in international market.

Going by the supply rates forwarded by IOC on Feb 15, NOC is currently incurring a loss of Rs 11.30 per liter of diesel, Rs 5.59 per liter of petrol and Rs 357 per cylinder (14.2 kg) of liquefied petroleum gas (LPG). At this rate, NOC has said it will suffer a loss of Rs 790 million on diesel alone in February. LPG and petrol too is set to inflict it a loss of Rs 360 million and Rs 80 million respectively this month.

Given the situation, the state-owned petroleum monopolist had recently proposed the government to allow it adjust petrol price by as much as Rs 7 per liter. It had sought permission to hike diesel and LPG prices as well.

“The only sustainable way out of the situation is to adjust domestic fuel prices in line with the international trend. Resorting to other means will solve our problem for short time only,” said NOC Spokesperson Mukunda Dhungel. He told Republica that the IOC has already started curtailing fuel supplies, mainly as the payment it made last week failed to meet cost of volume it had planned to import over this week.

On Tuesday, IOC supplied just 1,400 kiloliters of petroleum products from Raxaul, which is less by more than a third of what it was supplying on normal days.

“IOC´s other supply points have curtailed supply by even higher margin,” said Saroj Pandey, president of Nepal Petroleum Dealers´ Association.

Adhikari, meanwhile, assured Jha that he would consult with the Prime Minister and leaders of other political parties to address the concern of NOC.