Thursday, May 2, 2013

NOC springs back to profit but consumers do not get respite

The state-oil monopoly is back to black but it might take some time to trickle down its profit to the consumers.
"Though the Nepal Oil Corporation's (NOC) has projected Rs 200 million profit for May, it will be too early to adjust price of petroleum products downward," said acting managing director of NOC Suresh Kumar Agrawal.
The projected profit — after 10 months as earlier NOC had profited around Rs 150 million in July 2012 — could fail to benefit the consumers also due to state oil monopoly's accumulated losses.
"We can think of price adjustment, if the profiting trend continues," he said, adding that the NOC has Rs 28.5 billion accumulated loss, including loan till date.
The NOC has projected the profit on the basis of May 1 rate card of Indian Oil Corporation (IOC) — the sole supplier of NOC — which could change in a fortnight as the IOC sends rate card every first and 15th day according to Gregorian calendar, Agrawal added.
The reduction in loss of liquefied petroleum gas (LPG) — popularly known as cooking gas — has helped NOC profit for the time being. "The loss of NOC that stood at Rs 67.2 million for April was due to huge loss in cooking gas," he added.
The loss of cooking gas — that has been eating all the profits of other petroleum products' profits — has gone down by Rs 64 to Rs 439 from earlier Rs 504 per cylinder. Likewise, the NOC will profit Rs 12.89 per litre petrol, Rs 3.44 per litre diesel and Rs 15.83 per litre of kerosene, according to new rate card.
Instead of reducing price in haste, the NOC is rather planning to increase stock for smooth supply for the monsoon season," Agrawal said.
Currently, the NOC has a stock of 18,000 kilolitre (kl) of petroleum products.
The domestic market consumes 18,000 kilo litres (kl) of petrol, 68,000 kl of diesel, 3,000 kl of kerosene, some 3,000 kl ATF (domestic), 7,000 kl of ATF (international) and 1.3 million cylinders of LPG in a month, according to NOC projection.
"Smooth supply and energy guarantee are more important than the price adjustment in hurry that might have to retrace in 15 days," he added.
Despite his claims, the smooth supply of petroleum products has become rare in recent months due to syndicate of petroleum traders; and red-tape and mismanagement in technically bankrupt state oil monopoly.

Profit per litre
Petrol — Rs 12.89
Diesel — Rs 3.43
Kerosene — Rs 15.83
ATF (duty paid) — Rs 26.98
ATF (bonded) — Rs 31.70
(Source: Nepal Oil Corporation)

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