Import bill of petro products doubles

KATHMANDU, FEB 23: 

Due to the increase in price and consumption, the country has had to pay more than double the amount on its import bill for petroleum products in the last two fiscal years. 

“Nepal has imported petroleum products worth Rs 32.77 billion in the first five months of the current fiscal year against a Rs 15.18 billion import bill it paid in the same period of fiscal year 2009-10,” according to the central bank’s figures.

Nepal is becoming more dependent on petroleum products for meeting its energy requirements. The demand for all types of petroleum products like Motor Spirit, High Speed Diesel, Superior Kerosene Oil, Aviation Turbine Fuel, Furnish Oil and Liquefied Petroleum Gas is about 1.2 million tonnes per annum with an annual increase of 20 per cent.

Petroleum products constitute about 11 per cent of the total energy consumed in the country, according to Nepal Oil Corporation (NOC).

On one hand, the price of petroleum products is looking up and on the other, consumption has also seen a steep rise.

The country imported petroleum products worth Rs 75.07 billion in fiscal year 2010-11 as compared to imports worth Rs 51.61 billion a year ago, according to the central bank’s figures. “The country had imported petroleum products worth Rs 41.40 billion in fiscal year 2008-09.”

“The state oil monopoly had imported and sold 159,286 metric tonnes (MT) of cooking gas in fiscal year 2010-11, whereas it had imported and sold 141,171 MT of cooking gas in fiscal year 2009-10,” according to NOC figures, which revealed that the corporation sold 995,220 kl of petroleum products in fiscal year 2010-11.

With increasing consumption and imports, the country’s total exports are not sufficient to pay the bill for petroleum products, forcing the government to either find an alternative or decrease the import of petroleum products.

There have been frequent shortages of petroleum products and the technically insolvent NOC has been eagerly awaiting a long-term plan from the government that could help maintain smooth supply and reduce the loans of the state oil monopoly by checking the leakages.

Indian Oil Corporation (IOC) is the sole exporter of all petroleum products consumed in Nepal under a five-year agreement signed on March 31, 2007, which is going to be revised next month.

To meet the increasing demand, a memorandum of understanding between IOC and NOC has been reached to construct a cross border Petroleum Product Pipeline from IOC’s depot (Raxaul) to NOC’s depot (Amlekhgunj) which is expected to decrease transportation costs.

Source: THT