IOC to curtail petroleum products supply

The Valleytes may witness serpentine queues at the prtrol pumps from Sunday, if the state oil monopoly fails to pay its dues to the Indian Oil Corporation (IOC) by tomorrow evening.
The Indian Oil Corporation (IOC) – the sole supplier of Nepal Oil Corporation (NOC) – has warned to curtail the supply of petroleum products to Nepal, if NOC failes to clear its past dues that comes to around Rs 450 million.
"The IOC will supply lesser fuel, if we cannot settle our dues by tomorrow evening,” said a NOC source.
The market that has witnessed four shortages in recent times might face another one due to low supply of the petroleum products.
NOC has recently paid less – only Rs 1.97 billion to the IOC – than the import of the petroleum products this month. “The payment was Rs 240 million less,” according to the source. NOC receives the new rate list on the first and 16th of the Gregorian calendar month.
The difference between the January 1 import rates and existing retail prices has led to the huge losses, the source said, adding that NOC loss might cross Rs 650 million by the end of January.
NOC has imported all-time high volume of 112,000 kiloliters (kl) in December pushing it to the red. “The bills totalled to Rs 7.84 billion, raising outstanding dues sharply,” he added.
The petroleum monopolist had requested the government to grant it Rs 600 million or let tio hike the price to adjust according to the import price. But the government refused fearing a protest in case of price hike.
On one hand the state oil monopoly is incurring losses in recent months due to increasing international prices of oil and on the other it is providing free petroleum to the leaders at the cost of the customers.
The country has imported petroleum products worth Rs 53.24 billion -- teh highest among commodities Nepal imported -- in the last fiscal year 2009-10.