Nepal Oil Corporation (NOC) -- the sole distributor of petroleum products -- is planning to establish well-equipped laboratories soon in Birgunj and at its head office in Kathmandu to check the quality of petroleum products.
"In recent days, consumers -- especially bikers and auto-owners -- have been complaining of low-quality petroleum products that have damaged their vehicles," NOC managing director Digamber Jha said during its 39th anniversary. He added the establishment of well-equipped labs was a top priority. "NOC will set up two labs soon," Jha said.
The increasing adulteration has forced the oil monopoly to think of setting up labs. Due to prolonged power outage, the demand for petroleum products, especially diesel, has risen by 50 to 60 per cent this winter and adulterators are making hay due to the lack of quality control.
To check the adulteration, NOC recently made kerosene and diesel prices equal. "And to meet the rising demand it is planning to bring petroleum products from Barauni and Mughalsarai of India," Jha said.
NOC employees and Nepal Petroleum Dealers' Association (NPDA) alike lauded the NOC decision to make kerosene and dielel prices equal. "There was an adulteration scam of over Rs 700 million," alleged NPDA president Saroj Pandey. After kerosene and dieles prices were equalised, over the last two months the demand for kerosene dropped dramatically. The oil mafia was raking in tidy profits by mixing the earlier lower priced kerosene in diesel and passing off the mixture as diesel.
"There is around Rs 80 billion transaction of petroleum products in the country. But still there is no scientific pricing mechanism," Pandey said. "When crude price in the international market goes down, NOC should also downscale the price, and when it goes up NOC should also upscale it," he said adding that the only solution was an automatic pricing mechanism. However, there is no scientific pricing mechanism yet.
But NOC employees' union was of the view that it should not be only supply oriented. "Rather, NOC should also have its own pumps to ensure smooth and quality supply in case the private sector disrupts supply due to any reason," said NOC employees' union president Devi Neupane.
Apart from diesel, kerosene and petrol, NOC also supplies cooking gas. NOC is planning to permit the private sector to establish gas industries at the places where there is high demand. Neupane urged NOC not to get involved in gas supply as it was a losing proposition.
Around 2,500 dealers are associated with NOC and some 1,200 tankers are currently in use for supply.