IOC has resumed normal fuel supply

KATHMANDU, JUN 10 -

The Nepal Oil Corporation (NOC) has said normal fuel supply from the Indian Oil Corporation (IOC) has resumed after the government pledged to make available Rs 3 billion immediately to clear oil import bills.

IOC supplied 2000kl of petroleum from its Raksual depot on Saturday and rest of the Indian dipots will resume normal supply from Monday, according to the state-owned oil

monopoly. This is expected to end the fuel shortage.

After dues started to pile up, IOC had been supplying only one-third of the usual supply for the last week. NOC owes around IRs 2 billion to IOC in unpaid dues. “The situation will now turn to normalcy,” said NOC spokesperson Mukunda Dhungel.

An emergency meeting of senior government officials on Friday had decided to make available Rs 3 billion for NOC to pay oil import bills to IOC. As per the decision, the Finance Ministry will make available Rs 1.4 billion and Citizens Investment Trust (CIT) and Employees Provided Fund (EPF) Rs 1 billion and 600 million, respectively.

Finance Secretary Krishna Hari Baskota CIT has already readied Rs 700 million cheque, while EPF will provide the funds within a couple of days. “CIT has committed to provide the remaining amount soon,” said Baskota, adding that the Finance Ministry will provide promised amount within mid-June.

NOC has long been incurring huge losses due to its failure to adjust petroleum prices in line with the international price, leakages and rampant corruption. Its estimated loss in June stands at Rs 704.2 million. While NOC is incurring losses in diesel and liquefied petroleum gas, it is in making profits in petrol, kerosene and aviation fuel.

Baskota said the declining international price market will make NOC’s situation little easier in days to come. The oil price has remained below $100 per barrel in recent days in the international market.

However, NOC also owes large amounts to domestic creditors. It has to pay Rs 23.17 billion to government agencies and banks and financial institutions.

Source: The Kathmandu Post