Fuel import burns total export of country

It should be a warning call for the government as petroleum import is burning the country’s total exports.
"Nepal imported Rs 59.53 billion worth petroleum products in the first 10 months of the current fiscal year, whereas total exports stood at Rs 52.67 billion making the total exports' earning lesser than only petroleum products' import bill," said Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari, presenting Priorities and Principals of the budget for the fiscal year 2011-12 in the Parliament today.
The country’s total exports will not be enough to import even the petroleum products due to rising petroleum products consumption and price in the international market.
"It is going to be a serious challenge for the government,” he said, adding that the sole petroleum importer, Nepal Oil Corporation, has borrowed Rs 2.63 billion from government and additional Rs 3.30 billion from Employees Provident Fund and Citizen Investment Trust.
“The government will be forced to adjust the lending under the development expenses as it was earlier not mentioned in the budget,” Adhikari said, presenting the Priorities and Principals for the next budget in the Parliament for pre-budget discussion that is going to be held first time since the Constituent Assembly election. The parliament will start pre budget discussion from June 24.
Though the next budget’s Priorities and Principals has spelled implementation of Bio-fuel Policy to reduce the import of fossil fuel, the lawmakers suspected government’s ability to curb fuel import.
Another power utility Electricity Authority (NEA) is also not in a good financial health increasing the challenges to fulfill the growing energy needs of the country to boost manufacturing sector. But the finance minister said that the budget aims at restructuring of the Nepal Electricity Authority apart from expansion of transmission lines and promoting hydropower projects through Energy Development Bank.
"The cost of doing business has increased due to lack of regular power supply coupled with rising interest rates hurting industrial sectors’ growth,” he said.
The rising cost of production and supply constraints fuelled the price in the market. Though, the current fiscal year’s budget has projected to contain the price hike at seven per cent, the government could not crack whip and it is hovering around 10 per cent. Adhikari, however, promised to tackle price hike through Monetary Policy.
"On top of low production, productivity has also plunged making the domestic production less competitive in the international market,” he said, promising that his budget will be in line with Three Year Interim Plan that has envisioned poverty reduction through employment generation, and inclusive and justifiable economic growth for a sustainable peace. He has also said to create investment-friendly environment for private sector investment to excelarate economic growth.
Apart from his regular populist programmes like Aafno Gau Aafai Banau (Develope one's own village), Gau Gau ma Sahakari, Ghar Ghar ma Rojgari (Cooperatives in every Village and employment in every house), the Priorities and Principals has also spelled some infrastructure projects like Fast Track, Mi-Hill Highway and Model Village in every district.