Thursday, October 31, 2013

Government agrees to provide Rs 2 billion loan to NOC

The cabinet meeting today decided to provide another tranche of loan to the technically bankrupt state oil monopoly.
The government will provide Rs 2 billion to Nepal Oil Corporation (NOC) – in less than two months from the earlier Rs 2 billion – to clear its dues of its sole petroleum products supplier Indian Oil Corporation (IOC), the government's spokesperson said after the cabinet meeting.
Employess Provident Fund (EPF) and Citizen Investment Trust (CIT) will provide Rs 1 billion each to the debt ridden state entity.
The NOC will have a total of Rs 32 million, including Rs 12.64 billion of government, Rs 10 billion of EPF and Rs 6 billion of CIT.
According to the NOC, it is in loss in diesel and cooking gas, though it is making profit in petrol, kerosene, aviation fuel (domestic) and aviation fuel (international). NOC is expected to post a loss of Rs 1.04 billion in November according to the latest price list. And the red tape and mismanagement has not only hurt the state oil monopoly but also the economy as the demand of fuel is also increasing due to regular power outage and the Constituent Assembly (CA) election scheduled for November 19.
The election has forced the NOC to double its stock of petroleum products as the consumption will increase and ensuring smooth fuel supply will be difficult.
The state oil monopoly is planning to stock an additional 14,000 kiloliters (kl) for the election.
NOC has a storage capacity of 71,558 kl – across the country – that can fulfill the demand for less than 15 days.
The state oil monopoly has estimated that around 700 kl of petrol and 1,500 kl of diesel is consumed daily across the country. Kathmandu Valley alone consumes 350 kl petrol and 450 kl diesel everyday.

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