Saturday, August 24, 2013

Petroleum sector needs competition to improve supply system: Finance Minister

The state-oil monopoly needs private sector competitor to improve its management, supply system and better service, according to a minister.
It needs competitor also for the smooth supply of petroleum products across the country, said Minister of Commerce and Supplies Shankar Koirala, inaugurating the fifth AGM of Nepal Petroleum Transport Entrepreneurs Federation, here today.
As the state-oil monopoly has been unable to ensure smooth supply of the petroleum products, time and again, the government has also been thinking of opening the sector but the traders have opposed the government regulation that was brought to open the sector claiming it has been biased towards big players.
The government is, however, again planning to introduce Petroleum and Gas Transaction Orders to allow private players investment in the fuel business.  The Orders, that was scrapped earlier due to huge opposition, is likely to be reintroduced with some amendments favouring the private parties.
Earlier, the government had brought the Orders on March 13 but it was forced to scrap it on April 6 following a opposition from the petroleum traders, though some private firms – especially big business houses – had shown interest to invest in petroleum trade, oil processing, and exploration.
Petroleum has but always been a political commodity, he said, adding that the successive government failed to address the sector’s problemalso due to problems supply disruptions.
But Koirala said the private sector could also come in as strategic partner in the Nepal Oil Corporation (NOC).
Petroleum traders, on the occasion, has also requested the government to restructure Nepal Oil Corporation by bringing in the strategic partners from the private sector.
Petroleum products is the single largest commodity import of the country and NOC is the state oil monopoly that has been technically bankrupt. But the government has not been able to reform the oil trade due to various pressures – some political and other mismanagement – and rampant corruption in the NOC and among the fuel traders.

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