FNCCI blasts dual pricing on diesel

KATHMANDU, DEC 12 -

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has lambasted the government’s move to enforce dual pricing on diesel saying that it could hurt industrial production. The apex business body has also asked the government to cancel the decision.

Nepal Oil Corporation (NOC) has decided to increase the price of diesel for large users like factories, hotels, foreign missions, hospitals and development projects in a bid to cut losses and manage supplies. The state-owned oil monopoly has hiked the price of diesel by 25 percent to Rs 95 per litre.

“The dual pricing system decreases the productivity of industry besides encouraging a black market,” said Bhaskar Raj Rajkarnikar, acting president of the FNCCI. He added that it would make it more difficult for domestic industry to compete with foreign products. “Local consumers will have to pay extra for the products,” said Rajkarnikar, “Worse, industry will lose its comparative advantage.”

Other FNCCI officials said that use of generators for producing power was already making their industrial operation costlier. With such a sharp rise in the price of diesel, they said they would simply fail to compete on the domestic and international markets.

They said the recent move of the government reflected its negative attitude towards industry. Moreover, despite promising to provide a diesel plant to the industrial sector, the government hasn’t so far done anything, they added.

FNCCI Vice-President Pashupati Murarka stated that the government had pledged to slash the price of diesel by Rs 20 per litre for the industrial sector. “Instead of providing the facility, the government has imposed an additional burden on industrialists,” he said. Murarka added the government’s move to hike diesel price has come as a big blow to the industry at a time when it is already reeling under power shortage.

Source: Kantipur