Parliamentary committee submits Petroleum Act recommendation

KATHMANDU, June 13:

An 11-member parliamentary committee formed to recommend possible areas of reforms at the Nepal Oil Corporation (NOC) and country´s petroleum sector has submitted its report to the parliament with recommendations to formulate a Petroleum Act at the earliest.

The committee was formed in April after opposition parties obstructed parliament proceedings, and various student unions and the public took their protest to the streets following the government´s decision to raise the prices of petroleum products.

“In the report, we have urged the government to prepare a draft for the Petroleum Act within three months,” Usha Gurung, one of the committee members, told Republica. “The Petroleum Act will play a crucial role in enhancing the country´s petroleum sector and in controlling anomalies in the sector.”

The report has also suggested that the government buy petroleum products (petrol, diesel and kerosene) from its sole supplier -- Indian Oil Corporation (IOC) -- by weight instead of directly measuring the volume in oil tankers. “The system helps us get a more precise supply from IOC,” adds Gurung.

Citing the ineffective supply mechanism of liquefied petroleum gas (LPG) that sporadically creates spikes and shortages in all parts of the country, the panel has also recommended that the government open at least three Block Storages for LPG across the country.

Saying that decisions in NOC, being the sole supplier of petroleum products in the country, have to be scientific enough, the report says “The Board of Directors (BoD) of NOC should comprise of highly-skilled, trained and professional people, with at least 10 years’ experience in the sector so that it can perform effectively.” The provision to have representatives from consumers’ side has also been raised in the report.

Similarly, the report has recommended that all the loans to NOC be converted into working capital and that current capital be increased according to the need so that the corporation can come out from long-term loan burdens.

Other suggestions put forth in the reports includes a provision to import petroleum products from third countries; encouraging and creation of provisions for the private sector to be involved in the petroleum business; increasing of storage capacity to address the increasing demand; stepping ahead toward an auto price mechanism, fully automated receiving and delivery system in all depots; and reducing of administrative expenses, among others.

Source: Republica