Stronger dollar to weaken NOC

KATHMANDU,NOV 27: 

Nepal Oil Corporation (NOC) has projected some Rs 1.25 billion loss in the next month, December due to a record high dollar exchange rate with Indian Currency and rupee. 

“December will make a record high loss if dollar continue to rise against rupee,” for managing director Suresh Kumar Agrawal said, adding that the import of petroleum products will be affected if the government failed to adjust price. The Indian rupee on Tuesday hit a record low against the dollar, as fears about eurozone debt and the global economy as well as falling local stock markets provoked further selling of the currency, according to news agencies. 

“It is already too late to adjust the price of petroleum products,” Agrawal said. Successive government has been failing to adjust price of petroleum products fearing their unpopularity among general public. Minister for Commerce and Supplies had assertively come up with his plan to adjust price of petroleum products in the beginning of November but he backtracked from his promise within a week and said, “Cabinet should take responsibility of price hike.”

Later the minister tabled his propose of jacking up price of petroleum products in the cabinet. But cabinet decided to give responsibility to Finance Minister and Minister for Commerce and Supplies to take decision to this regard. And the ministry said that price adjustment of petroleum products is not possible any sooner.

Nepal Oil Corporation has to seek huge chunk of loan if price adjustment is not possible, Agrawal said. Currently, the corporation has proposed the Finance Ministry to release additional Rs 1 billion loan to it. But Finance Ministry is denying to provide the amount citing providing loan to Nepal Oil Corporation is not mentioned in the budget. The state oil monopoly has loss of Rs 999.35 every month according to November 16 price list of its sole distributer Indian Oil Corporation. It has an outstanding Rs 19 billion debt with different stakeholders at present.