NOC hikes petro prices

Nepal Oil Corporation (NOC) has finally raised the prices of all the petroleum products, with effect from mid night Wednesday.
"According to the new price list, kerosene and diesel will be dearer by Rs 3 and petrol by Rs 6 per litre," said Purushottam Ojha, secretary at the ministry of industry, commerce and supplies adding that the price of cooking gas will cost Rs 1100 per cylinder. "There is no change in the price of air turbine fuel (ATF) as it has already been adjusted."
"However, the prices may vary as the private dealers will fix the retail prices after adding their commission in the depo price," Ojha said. Besides commission, the dealers are allowed to charge shrinkage and working loss, insurance and transportation cost while they fix the retail price.
The NOC made a hike on the wholesale prices of all petroleum products citing whopping losses resulted from widening disparity between domestic and international price. "Government has given the freedom to adjust the price of petro-products," said Ojha adding that NOC has been continuously in touch with all the political parties and request their support.
Digamber Jha, acting chairman of the NOC said that the price hike was an obligation to avert a looming crisis on smooth supply of petroleum products.
In August 2006, the government had in a dramatic move scrapped its own decision within 48 hours of hiking prices of all major petroleum products.
NOC had hiked the wholesale price of petrol by Rs 15.77 per litre, diesel by Rs 4.98, kerosene by Rs 10.16 (open), air turbine fuel (ATF) by Rs 21.38 and cooking gas by Rs 100 per cylinder.
However, the cabinet decision has replaced the price hike with the earlier price of Rs 67.25 for petrol, Rs 53.15 for diesel, Rs 47.65 for kerosene, Rs 55 for ATF per litre and Rs 900 for a cylinder of cooking gas.
NOC had in last six months failed to pay many a times the outstanding dues to the Indian Oil Corporation (IOC) that stands at Rs 5 billion, resulting in the drastic cut in the supply lately. Earlier, students and poor people used to get subsidised kerosene. "However, there is no such provision as NOC has a single pricing now," said Ojha adding that the NOC is thinking of fixing separate prices for commercial use and non-commercial usage.
According to NOC, it has been incurring a huge loss of about Rs 400 million a month after the crude price skyrocketed in the international markets and touched a record high of $90 a barrel.
NOC owes about Rs 12 billion in total to various financial institutions in home and its sole supplier IOC.