NOC asks Rs 2b to keep fuel flowing
KATHMANDU, FEB 27 -
State-owned petroleum monopoly Nepal Oil Corporation (NOC) has warned it will not be able to provide a regular supply of fuel in the market if the government doesn’t give it money to pay for its imports. The perpetually cash-strapped corporation has asked the Finance Ministry for a grant of Rs 2 billion.
Officials from the Ministry of Commerce and Supplies said reduced shipments by its sole supplier Indian Oil Corporation (IOC) for the last three weeks has forced NOC to draw fuel from its stock to fulfil the Kathmandu valley’s requirement.
NOC’s reserves of 71,558 kl can fulfil the country’s gasoline demand for less than five days.
“Due to reduced imports, we have been supplying fuel to the market from our reserves too,” said NOC spokesperson Shiva Prasad Pudasaini. He added that there was no need for panic as NOC had been issuing 300 kl of petrol and 400 kl of diesel daily.
During the winter when load-shedding hours are extended, daily demand for diesel and petrol in the valley surges to 600 kl and 450 kl respectively. Pudasaini said that the valley had not suffered a petroleum shortage, but there has been some panic buying. “Due to rumours, consumers have been buying more than what they need leading to a jump in demand.”
Meanwhile, NOC which is in debt to the tune of Rs 28 billion, has been incurring monthly losses of Rs 634 million by selling fuel at subsidized rates. Similarly, NOC presently owes Rs 800 million to IOC. Pudasaini said that the Finance Ministry was agreeable to releasing the requested money, and that the supply would return to normal within a few days.
As NOC’s fuel stocks are receding and imports have been slashed, commerce secretary Lalmani Joshi is scheduled to meet chief secretary Lilamani Poudel and brief him on the current supply situation and looming shortage, said Deepak Subedi, spokesperson of the Commerce Ministry. “NOC will be bailed out within one to two days.”
On Feb 13, NOC ramped up the price of liquefied petroleum gas (LPG) by Rs 630 per cylinder to Rs 2,100 with the blessing of the government. The price hike was part of the corporation’s subsidized and non-subsidized pricing system. But prices were rolled back the next day following howls of protest from all quarters. NOC presently offers subsidies of Rs 587 on a cylinder of LPG and Rs 3.79 on a litre of diesel to all users. NOC’s loss in the LPG business alone stands at Rs 763 million.
Source: The Kathmandu Post
