Rising international price to push domestic petroleum products price up

Consumers are going to feel the heat of increasing international petroleum prices as loss making state-oil monopoly has no alternative to hike the prices, sooner or later.
"Even if the government lends us, there is no option to hike the price of petroleum products," said a higher official from Nepal Oil Corporation (NOC).
"If government lends, it could help smooth supply as we can pay supplier on time," he said, adding that price hike will only reduce the rising loss that is going up to Rs 1.77 billion from this month against the earlier estimate of Rs 1.55 billion loss.
According to the NOC, it will incur a loss of Rs 1.77 billion monthly based on a new price list that the state-oil monopoly received today from its sole supplier Indian Oil Corporation (IOC).
"Except in Air Turbine Fuel (ATF), NOC will incur losses in all other petroleum products including cooking gas," said the officials. "The state-oil monopoly's losses seem only increasing due to international price that has been on raise since last couple of months."
It was incurring a loss of Rs 1.55 billion till March and Rs 1.33 billion till February.
According to the new rate of today, the NOC will incur Rs 288.89 loss in a cylinder of cooking gas, Rs 3.75 loss per litre petrol, Rs 20.96 loss per litre diesel and Rs 11.25 loss per litre kerosene.
The sole supplier IOC sends new rate every first and 16th day according to the gregorian calender. On the 16th of every english month, IOC sends the prices petrol, diesel, kerosene, whereas on the first, it sends the rate of all the petroleum products including cooking gas and ATF, on which NOC will still earn Rs 9.20 profit per litre this month too.
The state-oil monopoly has been, however, critised by the consumers for being importer, supplier and regulator of the petroleum sector.
However, consumer rights activists demanded to end the monopoly of NOC arguing that competition will help reduce prices and quality of service.
"The mismanagement of NOC is responsible for the rising losses," Premlal Maharjan, president of Consumers Network for Consumers' Rights, said, demanding to form a separate Petroleum Board to regulat the petroleum sector.
"Political parties are also to blame for the losses," he said, adding that the partis should not politicise it and price has to be adjusted either based on international price or Indian market price.
"The upward or downward price adjustment according to the international price or Indian market price can salvage the state oil-monopoly and the consumers both," he added.