IOC proposes five per cent marketing margin on fuel export

KATHMANDU, MAR 13: 

Ministry of Commerce and Supplies is yet to convince Indian Oil Corporation (IOC) in reducing marketing margin though there is only 15 days to end the petroleum products import agreement between IOC and Nepal Oil Corporation (NOC).

“IOC has proposed five per cent marketing margin,” spokesperson at the ministry Deepak Subedi, said, adding that the ministry is, however, trying to reduce the market margin since NOC is a bulk buyer.

IOC has been charging 2.5 per cent marketing margin along with Price Adjustment Factor at present. But, IOC has proposed to scrap the Price Adjustment Factor after it became the issue of dispute in Nepal and replace it with doubling the marketing margin to five per cent.

However, parliamentarians and government officials have been saying that the increment in marketing margin will cost Nepal huge. “The overall import of petroleum products is increasing,” said secretary at the Office of Prime Minister Purushottam Ojha, who was secretary at the Ministry of Commerce and Supplies until some time ago. “Five per cent marketing margin means Nepal will have to bear millions extra.”

The dollar is gaining strength compared to rupees, he said, adding that it will also have impact since the price of petroleum products is skyrocketing in the international market.

Ojha suggested that Nepal should take stand on flat marketing margin instead of percentage base. “The government should directly talk to the Indian government, if the issue will not be solved in the ministerial level,” he said, adding that Nepal and India had signed a five-year agreement in March 2007 to import all the petroleum products from Indian Oil Corporation.

The ministry should sort out all the issues at the earliest since the time for new agreement is coming close, he suggested.

Earlier, lawmakers at the Economic and Labour Relation Committee suggested the government to promptly initiate direct talks with Indian government to renew fuel import contract with Indian Oil Corporation. Government intervention is a must to sort out thorny issues and India as a good neighbour would reduce five per cent marketing margin to supply petroleum products to Nepal,” lawmaker and former Finance Minister Dr Ram Sharan Mahat said.

Petrol pumps resume service

Petrol pumps in the Valley resumed their services late Monday after dealers and workers reached to an agreement. “Dealers have agreed to address the problem of workers within 15 days,” said spokesperson at the Ministry of Commerce and Supplies Deepak Subedi. Moist-aligned All Nepal Petroleum Workers’ Union had closed some 123 petrol pumps on Sunday demanding increment in their salary.