Government not serious on solving petroleum shortage

The authorities in the government and the Nepal Oil Corporation need to burn midnight oil to come up with a solution to address the concerns of those queuing up for fuel. But neither the debt-ridden NOC nor the government is willing to pour oil on the troubled waters, with thousands waiting in serpentine queues to get petrol for the last one week.
Nepal Oil Corporation will not be able to resume smooth supply of petroleum products for another week due to reduced import in the wake of its inability to pay the rising import bill and the strike of tankers since for a week.
Finance Minister Bharat Mohan Adhikari, who can rescue the NOC, will be back in the country only on Tuesday evening. And so will the Chairman of NOC Board and Commerce and Supplies secretary Purushottam Ojha, who is accompanying Adhikari to the US. In the absence of Adhikari and Ojha, the queues in front of valley petrol pumps are bound to stretch.
The NOC, meanwhile, has suggested the government to hike fuel price for smooth supply.
Petroleum price has touched $124 per barrel in the international market. “Nepal has no option but to hike the price,” said managing director of NOC, Digamber Jha.
According to the oil monopoly, its loss in April will be Rs 1.96 billion compared to earlier estimation of Rs 1.77 billion, as per the rate sent by the sole supplier, Indian Oil Corporation, on April 16. “The government should hike petrol prices by 10 per cent and aviation fuel prices by 20 per cent to reduce loss,” he suggested.
NOC has also advised the Ministry of Commerce and Supply to provide subsidy on diesel used in public transportation. “If we provide subsidy on diesel, the poor will not suffer and the market price will not rise,” he said, adding that NOC and consumers should jointly bear one-third of the increased cost of diesel.
“NOC incurs Rs 24 loss on a litre of diesel,” Jha said, adding that consumers, government and NOC should each contribute Rs 8 per litre of diesel to neutralise the loss. “The government can reduce taxes equal to the proposed contribution,” he added.
Currently, the government is earning Rs 12.42 on a litre of diesel, Rs 30.90 per litre of petrol, Rs 2.04 on a litre of kerosene and Rs 12.73 a litre on aviation fuel as revenue.
However, NOC is incurring Rs 23.26 loss on a litre of diesel, Rs 11.25 a litre on kerosene, Rs 10.02 per litre of aviation fuel and Rs 6.30 a litre on petrol, he informed, while asking the government to increase the prices at the earliest.
“If petroleum prices were not hiked, NOC will not be able to ensure smooth supply of fuel,” he said, adding that NOC does not have sufficient fuel storage in Kathmandu due to the reduced supply.
It has 29,000 kilolitre of diesel and 15,000 kl petrol stock in Thankot depot, that will last for just four days.