NOC warns disruption of smooth fuel supply

The technically bankrupt Nepal Oil Corporation (NOC) is again planning to hike prices of petroleum products as the stronger US dollar has increased its buying price forcing it to incur more losses.

Only last week, the state oil monopoly has increased the prices of petroleum products – except cooking gas – to reduce its soaring losses.
The NOC is, however, planning to gradually hike the prices of petroleum products to reduce its losses, acting managing director of NOC Suresh Agrawal, said here today.
It will incur a loss of Rs 1.06 billion in a month, according to the new price list sent by Indian Oil Corporation (IOC) on August 16, the NOC official informed, adding that the NOC, currently, owes IOC Rs 1.52 billion.
The sole supplier of petroleum products to NOC, IOC sends price list twice every month, on the first and 16th of Gregorian calender.

The NOC also warned that it will be unable to maintain smooth supply of petroleum products, if the government fails to lend it the money to pay IOC. “The government has to step in and help NOC manage finance,” he said.

The country had imported Rs 107.13 billion worth petroleum products from India in the last fiscal year 2012-13, when it has incurred Rs 3 billion losses. Though, NOC has Rs 500 million paid up capital, it has an accumulated loss of around Rs 29 billion. The board has proposed to increase the state oil monopoly’s paid up capital to Rs 19 billion.