NOC decides to keep fuel rates stable for two more weeks

KATHMANDU:

Nepal Oil Corporation (NOC) — the state-owned petroleum supply monopoly — has said that it will keep fuel prices stable this fortnight — from June 16 to 30 — despite a rise in petroleum import bill compared to last fortnight.

After the enforcement of the automatic pricing mechanism on September 29 last year, NOC has been revising prices of petrol, diesel and kerosene every fortnight as per the international fuel price update that it receives from its sole supplier — Indian Oil Corporation — on the first and 16th working day of the English calendar.

However, it has not made any adjustment in fuel prices after the devastating earthquake of April 25. NOC had immediately rolled back its decision to hike fuel price as per the fuel import bill of June 1 last fortnight, as its parent ministry — Ministry of Commerce and Supplies — directed it not to raise the rates citing turbulent time.

“The government has instructed NOC not to revise fuel prices this month,” informed Mukunda Ghimire, spokesperson for NOC. “Our profit will take a hit, but we are in a relatively comfortable position this month.”

Due to huge slump in import of liquefied petroleum gas (LPG), popularly known as cooking gas, NOC’s loss in cooking fuel is projected to stand at Rs 46.50 million. At present, NOC incurs loss of Rs 61.93 on the sale of each cylinder of cooking gas. As per NOC, the monthly sale of cooking gas has come down to 1.35 million cylinders, compared to 1.7 million cylinders during winter.

Rest of the products, except for cooking gas, are being sold at a profit. NOC’s profit projection is Rs 101.2 million from the sale of petrol, Rs 151.4 million from diesel, Rs 22 million from kerosene and Rs 343.6 million from aviation fuel this fortnight. After deducting the loss incurred in cooking gas, its monthly profit is expected to hover around Rs 572 million.

As per the price update received today, NOC will generate profit of Rs 10.12 from the sale of each litre of petrol, Rs 4.04 from diesel and Rs 17.77 from kerosene. Last fortnight, such profit stood at Rs 11.53 on petrol, Rs 4.93 on diesel and Rs 17.74 on kerosene.

NOC contributes 88 per cent of the profit generated through petrol and 99 per cent of the profit on diesel to the price stabilisation fund (PSF) — a fund set up to tackle fuel price volatility in the international market. So far, NOC has collected Rs 2.60 billion in the PSF.

As per NOC’s projection, the country consumes 20,000 kilolitres of petrol, 75,000 kilolitres of diesel and 2,500 kilolitres of kerosene a month. Likewise, monthly consumption of aviation fuel is measured at 10,000 kilolitres and cooking gas is around 1.5 million cylinders.

Source: THT