Graft, nepotism hits debt striken state oil monopoly in need of structural reform

Had the government and the state oil monopoly heeded to the advice of several well-meaning committees in the past, consumers would not have been suffering today.
The Nepal Oil Corporation buys petroleum products at a higher price and sells them at a lower price, according to a member of a high level committee — headed by CA member Bhim Prasad Acharya — that is finalising the recommendations for detailed reform of state oil monopoly for smooth supply of petroleum products.
“Nepal Oil Corporation is completely crippled by corruption, along with nepotism,” he said, adding that NOC was in dire need of structural reform, along with price adjustment, to ensure smooth fuel supply.
During a consultation meeting with the high-level committee, stakeholders from different sections of the society have emphasised on the need of structural reform of the corporation and adoption of automatic price adjustment system to ensure smooth supply of petroleum products.
Though five committees have already submitted their reports recommending government to reform NOC for smooth supply of petroleum products, successive governments have failed to implement the reports. A committee headed by Bhanu Prasad Acharya in 2003 had also recommended the government to fix the price through automatic price adjustment system. The Acharya committee had also suggested a practical way to adjust price according to the international market. However, the recommendation has been gathering dust at the NOC. Interestingly, one of the members of that committee, Purushottam Ojha, is secretary at the Ministry of Commerce and Supplies, which is responsible for regulating NOC and importing petroleum products. However, he has not made any policy in line with that report so far.
“The government and NOC did not show their readiness and will-power to implement recommendations of the committees in the past,” lamented consumer rights activist Jyoti Baniya, who is also a member of the high-level committee formed by the present government to recommend ways to ease fuel supply.
The stakeholders advised the present high-level committee to reduce shrinkage and technical losses and operational cost, thought to be the loopholes in the pricing mechanism. “NOC officials take kickbacks at the time of issuing dealership and transportation permits,” another member of the high-level committee alleged.