NOC asks govt for Rs 3.5b to boost gasoline reserves

KATHMANDU, JUN 11 -

Nepal Oil Corporation (NOC) has asked the government for a Rs 3.5 billion handout to recharge its falling gasoline reserves. The state-owned oil monopoly said that it had 15,000 kl of fuel against its capacity to hold 72,000 kl at various depots around the country.

“The move is aimed at collecting adequate petroleum stocks to enable us to maintain smooth supplies in the event of a crisis,” said NOC Spokesperson Mukunda Ghimire. “The existing stocks will be able to meet the requirement of three-four days only,” he said. Topping off the fuel tanks will ensure supplies for eight to 10 days, he added.

This is the second time in two months that NOC has asked the government for money. In April, the Finance Ministry had released Rs 2.5 billion (Rs 1.5 billion from the Employees’ Provident Fund and Rs 1 billion from the Citizen Investment Trust) to finance petroleum imports.

Ghimire said that NOC had to issue fuel from its reserves following the weekend as no fresh shipments arrive from India during the holidays. This sometimes results in reduced supplies and a rush at gasoline stations, he added.

Nepal observes the weekend on Saturday while in India it occurs on Sunday. This means that no fuel is received for two days in a week, and Mondays usually see queues forming outside petrol stations. Gasoline shipments are disrupted on other public holidays too.

“We have even failed to maintain sufficient stocks at the Thankot depot, one of the main buffer stocks of the Kathmandu valley,” said Ghimire. The valley’s daily requirement of petrol and diesel amounts to 800 kl.

Cash-strapped NOC already owes Rs 37.66 billion to the government and different financial institutions. It has been racking up losses of Rs 288 million every month.

As per the oil tariff sent by Indian Oil Corporation on June 1, NOC’s projected loss on each litre of diesel comes to Rs 1.55. Similarly, it loses Rs 559.73 on each cylinder of LPG sold. However, it enjoys a profit of Rs 9.63 on a litre of petrol and Rs 13.88 on a litre of kerosene.

It also makes a profit of Rs 39.01 and Rs 46.23 on a litre of aviation fuel sold to domestic and international carriers respectively.

Source: The Kathmandu Post