MoF writes to EPF, CIT for loans to NOC

KATHMANDU, April 17:The Ministry of Finance (MoF) dispatched letters to the Employees Provident Fund (EPF) and Citizen Investment Trust (CIT) on Thursday asking them to jointly provide Rs 2.5 billion in loans to debt-ridden Nepal Oil Corporation, the state-owned sole petroleum importer of the country, so that it can pay off part of its dues to Indian Oil Corporation (IOC), NOC’s supplier.

The move comes as the government struggles to maintain a smooth supply of petroleum products.

IOC slashed supplies of petroleum products to NOC after NOC failed to pay its outstanding dues to IOC.

“We have come to know that MoF has dispatched a letter to EPF and CIT for Rs 2.5 billion loans to NOC. We have already requested IOC for supply of petroleum products as usual,” NOC spokesperson Mukunda Prasad Ghimire told Republica.

NOC made the request to IOC for a smooth supply of the petroleum products following the government´s nod on Wednesday to arrange the loans.

Ghimire said he was hopeful of smooth supply resuming Friday onwards. “IOC officials are positive about resuming supply after getting payment of the dues,” he said.

NOC owes IOC a total of Rs 5 billion.

According to sources, the boards of EPF and CIT will meet separately on Friday to decide whether to issue the loans.

If they decide to g ahead, NOC will get the loan after endorsement by a cabinet meeting on Monday.

IOC started cutting down fuel supplies by 30 percent after NOC failed to pay back within its March deadline.

The drop in supply has caused a shortage of fuel in the country. NOC managed to distribute only 238,000 liters of petrol in the capital on Thursday where the daily demand stands at around 350,000 liters.

Source: Republica