NOC’s monthly projected loss balloons to Rs 1.68b
KATHMANDU, SEP 18 -
The monthly projected loss of the Nepal Oil Corporation ( NOC ) soared to Rs 1.68 billion as per the latest tariff sent by its sole supplier, the Indian Oil Corporation (IOC), on Monday.
The NOC said that the loss is due to the rising crude oil price in the international market and appreciation of the US dollar. The monthly loss was originally estimated at Rs 1.33 billion before the price revision.
The IOC reviews the export prices of petrol and diesel fortnightly, and other products such as kerosene, aviation fuel and LPG on a monthly basis. As per the revised tariff, the NOC said its loss on a litre of diesel amounted to Rs 15.20, or Rs 1.03 billion with a projected monthly sale of 68,000 kilolitres of diesel.
Perennially broke, the NOC will be incurring losses of Rs 880 million per month by selling subsidised liquefied petroleum gas (LPG). It has been providing a subsidy of Rs 628 on an LPG cylinder. The estimated losses are based on the projected consumption of 1.4 million LPG cylinders monthly.
However, the state-owned oil monopoly enjoys a profit of Rs 151 million and Rs 82.5 million on aviation fuel sold to international and domestic airlines, respectively. The NOC said it owes Rs 2.40 billion to the IOC due to the loss-inducing fuel subsidy policy.
“As the government has decided to bail-out the NOC with a Rs 2 billion loan to finance petroleum import, we are in the process to withdraw the loan soon,” said the NOC spokesperson Shiva Prasad Pudasaini. “As soon as we receive the amount, we will be clearing our dues with the IOC.”
In response to the NOC seeking Rs 4 billion in grants to finance petroleum imports, the government last week decided to provide the loan to ensure a smooth fuel supply during the Dashain and Tihar festivals.
The Citizen Investment Trust and the Employees Provident Fund will provide Rs 1 billion each in loans to the NOC against the government’s guarantee. To offset its losses, the NOC had increased petrol by Rs 5 per litre, kerosene and diesel by Rs 3 per litre and added Rs 7 per litre to the cost of domestic aircraft fuel on September 10.
However, 14 student unions had been pressing the corporation to roll back the price. “We are not in position to roll back the hiked price in the given scenario,” Pudasaini added. The NOC ’s outstanding debts to the government and financial institutions stand at around Rs 28.50 billion at present.
Source: The Kathmandu Post
