NOC set to swing back to red. Monthly projected loss to balloon to Rs 164.7 million
KATHMANDU, AUG 02 -
After briefly enjoying profit in July, the Nepal Oil Corporation (NOC) is set to swing back into red. A new tariff of petroleum products sent by the Indian Oil Corporation (IOC) on August 1 shows NOC’s monthly projected loss to balloon to Rs 164.7 million from Rs 13.2 million in mid July.
The NOC had projected a monthly profit of Rs 131 million in July 1, but it was revised to losses of Rs 13.2 million on July 16—in line with the IOC’s new price list. IOC, the sole supplier of fuel to Nepal, reviews export prices of petrol and diesel every fortnight and other products such as kerosene, aviation fuel and LPG on a monthly basis.
“We [NOC] are back to losses now,” said Suresh Kumar Agrawal, NOC acting managing director. As per the revised tariff, the NOC will incur a loss of Rs 5.41on a litre of diesel, up from Rs 1.86.
The corporation’s loss on LPG has come down from Rs 351.63 a cylinder to Rs 205.96.
However, the corporation will enjoy a profit of Rs 7.39 on a litre of petrol, Rs 10.62 on a litre of kerosene and Rs 16.50 and Rs 27.89 on a litre of aviation fuel sold to domestic and international airlines respectively.
The loss is based on monthly projected consumption of 65,000kl diesel, 17,000kl petrol, 6,000kl kerosene, 10,000 kl aviation fuel sold to domestic and international airlines and 1.2 million cylinders.
The big loss came on the back of hike in pertroleum products in the international market. Brent crude has risen more than 8 percent in July and settled at $106 per barrel on Monday before ending July, according to Reuters report.
Brent crude oil price in the international market had hovered around US$ 89-90 per barrel in the previous month. Currently, the perennially broke NOC’s loans to the government and, banks and financial institutions stand at Rs 26.62 billion.
NOC, NLPGIA talks
The Nepal Oil Corporation (NOC) has invited Nepal LPG Industry Association (NLPGIA) for talks to resolve the ongoing dispute over the association’s demands. On July 30, NLPGIA had submitted a 16-point demand, including a hike in their commission and cancellation of the planned dual cylinder system.
The association of liquefied petroleum gas (LPG) bottlers has threatened to stop collecting purchase delivery orders from the NOC from August 7 and stop the supply of LPG from August 15 if their demands were not met.
“On Wednesday, the NOC called us (NLPGIA) to report on the objectives of our planned protest,” said Kush Prasad Mally, general secretary of NLPGIA. “The NOC has decided to hold talks on the issue on Monday,” he said.
Source: The Kathmandu Post
