Sunday, March 24, 2013

Petro dealers, transporters threaten to halt supply, bargaining to hike commission rate

Nepal LP Gas Industries Association, Nepal Petroleum Dealers’ Association and Nepal Petroleum Transporters’ Association today threatened to halt petroleum supply, if the government does not revoke its new decision to open the sector for private companies.
The government had issued the directive last week.
However, the consumer rights activists claimed that the hidden agenda is to bargain increment of commission rate, not the involvement of private sector in petroleum business, as it will take long time and huge investment for private sector's involvement in petroleum business.
"If the directive to open petroleum sector for private companies is not revoked soon we will stop petroleum — petrol, diesel, kerosene and cooking gas — supply across the country from April 7," their joint press statement read.
According to the statement, the organisations will submit their demand to chairman of the interim election government Khil Raj Regmi.
"We are going to submit our demand to the head of the government once we get time from him," they said, accusing the former government led by Dr Baburam Bhattarai for the decision to open the petroleum sector to the private sector without sufficient homework. "The decision was taken in the interest of big business houses," they said.
However, the directive, intended to open the petroleum market to the private sector and build competition between the public and private sector, could rescue the technically bankrupt state oil monopoly and benefit consumers as companies will fix the price according to the market rate.
Competition in the market will reduce the problem of petroleum shortage being witnessed from time to time, and is also expected to reduce prices in the market.
Consumer groups are hopeful that it will benefit consumers regarding price and regular supply. "The decision will help consumers," said president of National Consumer Forum Premlal Maharjan. "It will at least ensure smooth supply of petroleum products."
Consumer rights activists suspect that the current threat to halt supply in protest against private sector involvement in petroleum business is only for public consumption. "The inside story is that they want to increase their commission rate," he said, adding that they are getting three per cent commission and now want it to be increased to five per cent.
"Since the commission issue could be rejected by the public, they have taken up the issue of private sector involvement to bargain with the government for increased commission."
The private sector's entry in the petroleum business will not happen any time soon as it requires billions of rupees in investment. The directive has set a criterion of Rs 10 billion capital for any company that wants to enter the petroleum business.

NOC pays IOC dues
KATHMANDU: Nepal Oil Corporation (NOC) — the state oil monopoly — has paid all its dues to its sole supplier — Indian Oil Corporation (IOC). NOC has paid Rs two billion to IOC, said spokesperson of NOC Shiva Prasad Pudasaini. "It will ensure smooth petroleum supply," he said, adding that NOC has paid around Rs 5.44 billion to IOC in March. According to him, the dues were paid from the money given by the government.

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