Sunday, February 28, 2016

Government needs to spend around one-and-a-half billion development expenditure every day

The government has a challenging task of spending around one-and-a-half billion of development budgets every day to meet expenditure targets of the budget for current fiscal year 2015-16.
According to Financial Comptroller General's Office (FCGO), the government has been able to spend only Rs 21.51 billion, or just 10.30 per cent of development expenditure, by February 25. Though only 135 days are remaining in the fiscal year, which ends in mid-July, the government is still to spend Rs 187.35 billion development expenditure. It means that the government will have to spend Rs 1.39 million ever day, if it wants to meet the target of development spending.
Finance minister of the erstwhile government led by Sushil Koirala, Dr Ram Sharan Mahat had allocated Rs 208.87 billion for the development spending for the current fiscal year 2015-16.
However, the post-earthquake dilemma and Indian blockade after the promulgation of Constitution on September 20, which created shortage of fuel, made the government technically unable to spend any of the development expenses.
Under pressure to up spending, Office of the Prime Minister and Council of Ministers on Friday directed secretaries of all the ministries to accelerate development spending. In the meeting chaired by prime minister Khadga Prasad Sharma Oli, chief secretary Som Lal Subedi directed secretaries of concerned ministries to report him about development expenses made now onwards on a fortnightly basis, according to a secretary who attended the meeting.
“Though the chief secretary has directed us to report him every fortnight, it is very difficult to increasing development spending,” the secretary said, adding that the situation has not normalised even though the blockade has been lifted. "Development projects are still facing shortage of fuel."
Mahat had presented a budget of Rs 819.47 billion for the current fiscal year 2015-16 on July 14, 2015. He had allocated Rs 484.27 billion for recurrent expenditure like salary payment of civil servants, grants to local bodies and interest payment; Rs 208.88 billion for capital expenditure like spending on civil works and purchase of land, building, furniture, vehicles, plants and machinery; and Rs 126.32 billion for financing provision like lending to state-owned enterprises and principal repayment.
He had also allocated Rs 91 billion for reconstruction of structures damaged by the devastating earthquakes of April and May. But the incumbent government and National Reconstruction Authority (NRA) have already declared that the reconstruction works will only start after April 25, marking the first anniversary of the devastating earthquake.
The government is under tremendous pressure to kick-start stalled development projects as the fiscal year is coming to an end in just four-and-a-half months.
Earlier, on Thursday, ADB president Takehiko Nakao had asked PM Oli and finance minister Bishnu Poudel to accelerate the pace of investment for reconstruction and other development programs in order to achieve economic growth potential of 7 per cent to 8 per cent per annum in the medium term. "Nepal's public capital spending has been low at an average of 3.5 per cent of gross domestic product (GDP) over the last five years compared to the 8 per cent to 12 per cent required to fill the critical infrastructure gap within a decade," he had said.

Thursday, February 25, 2016

US President Obama signs Nepal trade preferences bill, export not easy task

Nepali readymade garment has officially received duty-free facility in the US market as the US president Barack Obama yesterday signed a legislation.
The bill, which was endorsed by the US Senate in the second week of December, paves the way for some 66 types of Nepali exports, including manufactures of apparels, certain carpets, headgear, shawls, scarves, and travel goods, to enjoy duty-free market access in the US. According to a statement of the US embassy in Kathmandu, the legislation authorising special trade preferences for Nepal grants duty-free tariff benefits for up to 66 types of Nepali items.
Now that the bill has received the president’s seal, it is reported that a team of the US International Trade Commission (ITC) will visit Nepal by mid-March to review the status of infrastructure and capacity of the country to utilise preferences extended by the world’s largest economy. ITC is an independent agency of the US that provides trade expertise to both the legislative and executive branches.
The Nepal programme is authorised for 10 years and designed to help Nepal's economy recover from the effects of the earthquakes that struck the country in 2015, according to the statement. After the new law comes into effect, Nepal will be able to enjoy duty-free facility on export of garments till December 9, 2025.
The programme grants duty-free tariff benefits for Nepali exports not currently eligible for benefits under the General System of Preferences (GSP), the largest and oldest US trade preference programme that provides duty-free facility in the US market.
The Nepal Trade Preferences Legislation also outlines a trade capacity building programme, focused on helping Nepal implement the World Trade Organisation's Trade Facilitation Agreement (TFA).
"This is a tremendous opportunity for Nepali business to expand their imports to US markets," US ambassador to Nepal Alaina B Teplitz was quoted in the embassy statement, adding that the US is looking forward to learning more about Nepal's plans for implementing the TFA and how the US government could contribute to this goal.
Howwever, certain administrative steps need to be completed in the US for the new trade preference programme to go into effect, the statement further added.
First, the president must certify that Nepal meets the eligibility requirements of the programme, which are the same as those for African Growth and Opportunity Act countries.
Secondly, the US is also required to request a review by the US ITC of the products covered by the preference programme to ensure that an increase in imports of these products into the US market will not negatively affect the US economy. These statutorily-required reviews will take several months to complete, according to the embassy.
Meanwhile, Nepali garment manufacturers have welcomed the US government move, saying that it will provide an opportunity to revive the industry. But they have asked the government to update Nepal's labour laws, provide uninterrupted power, and solve transit problems while exporting through India, along with facilitating soft loan to exporters to benefit from the US move.
According to president of Garment Association of Nepal (GAN) Chandi Prasad Aryal, the US market used to make up 85 per cent of the total exports of garments from Nepal. "The move could benefit Nepal, if the government took it seriously and provided necessary facilities to boost exports," he said.
The garment industry has today been squeezed down to only Rs 5 billion," he said, adding that it used to export Rs 13 billion worth garments right until 2001. In the fiscal year 2000-01, Nepal’s garment exports reached an all-time high of Rs 13.12 billion, with exports to the US accounting for 86.49 per cent. But the exports plunged after the US scrapped the quota system in 2005 as per the agreement on Textiles and Clothing (ATC) of the WTO. The garment exports slumped to Rs 5.28 billion in 2014-15 and number of garment industries came down to around 50 from over 400 in 2000-01.
After the expiry of Multi Fibre Agreement (MFA), popularly known as quota phase out, in January 2005, the US government has been imposing around 17 per cent tariff on import of cotton apparels.
Aryal, however, said that the authorisation of Nepal Programme has addressed the demand of Nepali garment manufacturers, who had been lobbying for duty-free entry for Nepali products for over a decade. After the US move, the Nepali garments – that lost its ground after 2002 – will now be competitive in the US market.
According to Aryal, GAN has started homework to improve production capacity of domestic garment industry. But government facilitation is a key, he added.
Though, trade experts claim that only 40 per cent of the Nepali garments being exported to the US could be eligible for receiving the GSP, Nepali ready-made garment industry could reclaim its lost glory provided the government supports the industry wholeheartedly.

Accelerate development spending: ADB

Asian Development Bank (ADB) – one of Nepal's key development partners – has asked the government to accelerate investment for reconstruction and other development programmes.
During a meeting with prime minister Khadga Prasad Oli and finance minister Bishnu Poudel today, visiting ADB president Takehiko Nakao said that it was essential to accelerate the pace of investment for reconstruction and other development programmes in order to achieve its economic growth potential of 7 per cent to 8 per cent per annum in the medium term.
"Nepal's public capital spending has been low at an average of 3.5 per cent of gross domestic product (GDP) over the last five years compared to the 8 per cent to 12 per cent required to fill the critical infrastructure gap within a decade," he said.
A large portion of ADB's currently-committed assistance of $1.75 billion – equivalent to 6 per cent of Nepal's GDP – remains unspent.
The government and ADB should work together to speed up project implementation, including promoting timely and proactive decision-making by project implementing agencies, Nakao said.
Implementation of projects slowed further in 2015 due to the earthquake, aftershocks, and supply disruptions in southern border districts.
"Now that the situation has normalised, the government needs to step up efforts to make up for the delayed reconstruction, as well as build fundamental capacity for project planning, implementation, and monitoring," he added. In this regard, Nakao also welcomed the recent establishment of the National Reconstruction Authority (NRA).
The Capacity Development Resource Center at the Nepal Administrative Staff College, established in late 2015 and supported by ADB's technical assistance, will be instrumental in providing regular and long-term training to staff at agencies implementing the projects and related government officials, he said while exchanging his views with the prime minister and finance minister on the need for a long-term socio-economic development strategy and medium-term development plan, the preparation of which the government had initiated recently.
"Enactment of the new Constitution and launch of the United Nations' Sustainable Development Goals (UN SDGs) have provided an excellent opportunity to prepare a long-term vision and development strategy for Nepal," Nakao said, adding that they will help the government deepen reforms, prioritise public investment, and spur private investment in all sector. "The ADB would continue to provide technical assistance to support this planning process."
Nepal was a founding developing-member country of ADB and ADB started its lending operations here in 1969. ADB has approved 135 sovereign loans totaling $3.7 billion till date. It has also approved five non-sovereign loans, equity investment and guarantees totaling $49.5 million.
During the visit, Nakao said ADB was also willing to expand annual lending to Nepal by 70 per cent to $500 million per year from the current $300 million to support critical investments and reforms.
Under ADB's country partnership strategy with Nepal for 2013-2017, ADB is prioritising major investment in hydropower generation and transmission, enhancing the capacity of international airports, building new economic corridors to promote regional trade, and reforming the higher education system.
ADB will continue its support for inclusive growth through investment in agricultural diversification and productivity, urban and rural water supply and sanitation, and rural roads. ADB will work to attract private sector investment and public-private partnerships for large-scale hydropower and transmission projects and high-value agricultural value chains.
Nakao, the prime minister and the finance minister also discussed Nepal's economic recovery and social development after the devastating earthquakes in 2015.
During the discussions, Nakao praised Nepal's enactment of its new Constitution as a major milestone in its political transition process. "The new Constitution marks a new era for Nepal and lays the foundation for lasting peace, stability, and more rapid socio-economic progress," he said, adding that he hoped the remaining political differences over the new constitution would be amicably resolved soon, paving the way for its timely implementation. "ADB is ready to provide assistance for Nepal's transition to a new governance structure and public management systems as envisaged in the constitution."
ADB forecasts that Nepal's economy will grow 1.5 per cent in the current fiscal year 2015-16 – down from last fiscal year's 3 per cent growth – hit by the 2015 earthquake and subsequent supply disruptions due to Indian economic blockade. ADB is expecting growth will pick up to 4.8 per cent in next fiscal year 2016-17.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by its 67 members, 48 from the region.

Thursday, February 11, 2016

Private sector suggests premier to seek implementation of earlier agreements with India

The private sector has suggested Prime Minister KP Sharma Oli to seek assurance of implementation of previous agreements with India during the latter's visit scheduled for next week.
Asking the 'nationalist PM Oli' to focus on improving relations with the southern neighbour and lure more Indian investment into the country, the private sector today at the meeting with him and prominent ministers of his cabinet at PM's official residence Baluwater, also recommended the premier to seek assurance of implementation of Pancheswar Multipurpose Project to harness Nepal’s water resources for the benefit of both the nations and better utilisation of line of credit facility extended by India.
Signing the Mahakali Treaty and Pancheswar Multipurpose Project, more than 2 decade ago, the incumbent premier Oli had then claimed that Nepal would get Rs 130 billion annually from India from the project. However, in last almost 25 years down the line, thousands of cubic metres of water has flown down the Mahakali river but the country has not received a single penny but is reeling under acute shortage of electricity as the power cut has reached 13 hours a day, currently.
Likewise, the country is facing shortage of essential drugs and fuel due to blockade by India since – against the Nepal's right to land-locked country – last four months after the promulgation of Constitution by the Constituent Assembly (CA) on September 23.
Thus, the private sector asked the premier to ensure free and smooth trans-shipment facility for Nepal from India as a land-locked country. Some 20,000 industries have been closed and around 400,000 have been employed due to Indian blockade since last months that created shortage of raw materials and petroleum products through Nepal-India border customs. Indian Oil Corporation (IOC) is the sole petroleum products suppliers to Nepal Oil Corporation (NOC). But the IOC has not been supplying petroleum products, according to the agreement saying that it has no orders from Indian government to supply fuel to Nepal.
The visit is also expected to clarify on the bilateral agreements as time and again Nepal has been blocked the essential supplies including petroleum products and medicines despite the bilateral agreements, regional and sub-regional agreements, and global agreements including Nepal's right to land-locked countries.
The premier had invited the private sector for consultation on pertinent issues that need to be raised during his visit to the southern neighbour scheduled from February 19 to 24.
According to Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Pashupati Murarka, the prime minister also asked for an integrated proposal from the private sector.
"The government has also identified matters that need to be raised during my visit to India, and we will also integrate the proposal from the private sector during the talks," Murarka quoted the prime minister as saying during the talks with Private sector representatives including FNCCI, Confederation of Nepalese Industries (CNI), Nepal Chamber of Commerce (NCC), Nepal-India Chamber of Commerce and Industry (NICCI).
The prime minister also told the private sector that his visit will be focused on improving and strengthening bilateral ties with India. Deputy prime minister and foreign minister Kamal Thapa, finance minister Bishnu Prasad Paudel, commerce minister Deepak Bohara, industry minister Som Prasad Pandey and high-level bureaucrats were present during the meeting.
A 15-member private sector team will also be part of the Prime Minister’s delegation to India. Apart from New Delhi, Oli is also scheduled to visit the economic capital of India, Mumbai.

Tuesday, February 9, 2016

Private sector mourns death of former PM Koirala

The private sector has expressed grief at the demise of former Prime Minister and Nepali Congress (NC) president Sushil Koirala. Koirala, 77, passed away today morning at his residence. The private sector was stunned by Koirala's sudden demise, they said.
Issuing separate statements, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), Nepal Chamber of Commerce (NCC) and Non-Resident Nepali Association (NRNA) described Koirala's passing away as 'a great loss' to the nation.
According to the president of FNCCI Pashupati Muraraka, the country has suffered an unbearable loss. "Koirala had a significant contribution to the democratic movement with commendable leadership," he said, adding that the private sector will always appreciate his contribution of leading the country through the transition and promulgation of a new Constitution. It was Sushil Koirala, who drivered the promulgation of a new Constitution through the Constituent Assembly, despite a huge pressure from in and out of the country.
The FNCCI also claimed that Koirala was always concerned for the economic development of Nepal. "Now the implementation of the new Constitution and lead the country towards a prosperous future rests on the political parties," the umbrella organisation of the private sector said, adding that Koirala had played a legendary role in the democratic movement and especially in institutionalising democratic republic in the country. “During meetings with the private sector, Koirala used to encourage the private sector to make investments and attract foreign investment as well."
The biggest achievement of Koirala's political career was the promulgation of the Constitution on September 20, 2015. In his capacity as the Prime Minister, Koirala played a crucial role in generating political consensus for the statute’s endorsement despite various pressures.
Under his leadership, the Nepali Congree (NC) re-emerged as the largest party with the highest number of votes. Koirala led the government from February 2014, after the election to the second Constituent Assembly (CA). He was elected as the NC party president in September 2010.
Koirala, when was the premier, used to say that Nepal would embark on a economic development journey and the government’s focus would shift towards economic development once the Constitution was promulgated.
According to CNI, the country lost an honest and simple person with a clean character. "Koirala was a strong supporter of independence, democratic values and liberal economy," it further said, adding that Koirala’s death has not just created a void on the political front but also on the economic front.
The chamber has also lauded Koirala’s role in uniting the political parties for the promulgation of the new Constitution. "The people’s hopes of seeing a new constitution through the Constituent Assembly was fulfilled during his tenure,” according to president of chamber Rajesh Kazi Shrestha.
The supporter of open market and free economy, Koirala firmly believed open market and free economy play a crucial role for country's development and prosperity.
According to the chamber, Koirala always played an inspirational role for the country’s private sector. "Koirala believed that the sustainable development of the country was possible only through an open market, liberal economy and private sector," the NCC said, adding that he always believed the nation will prosper with private sector-led economic growth.
Though, he did not have much knowledge about economics, and was not aware of how it exactly functioned, he was keen on attracting domestic and foreign investments for employment generation and economic development of the country. He also used to say that the country’s resources have to be used properly so that prosperity could be shared.
Going against the tide, he also made some bold decisions like signing power trade deal with India during his 20-month reign from February 2014 to October 2015. Likewise, the signing of two agreements on development of 900MW Upper Karnali and 900MW Arun-3 hydroelectric projects worth over $2 billion was also possible under Koirala's premiership.
Koirala’s government also revived talks on construction of 5,600MW Pancheshwar Multipurpose Project after a hiatus of almost two decades; allowed at least three foreign companies to establish cement plants worth tens of billions of rupees; and lured billions of rupees of investment in the hotel sector. Koirala, however, did not sign any agreement that was against the national interest, despite pressures from within and outside his party.
During his tenure as Prime Minister Nepal's received a record Rs 270.60 billion foreign aid commitments in fiscal year 2014-15. Koirala also supported the process of revising or framing around three dozen policies and Acts to attract foreign investment and protect the interest of investors.
The Koirala government was also hailed by the international community as it was quick in responding the devastating earthquake of April 25 and mobilised the National Planning Commission -- chaired by him -- to conduct Post Disaster Needs Assessment (PDNA). An International Conference on Nepal's Reconstruction (ICNR) on the basis of PDNA helped Nepal receive funding commitment of $4.1 billion for reconstruction and rehabilitation works from the international community.
The international community, including Non-Resident Nepali Association (NRNA) has also mourned the sudden demise of Koirala.
NRNA president Shesh Ghale, in a statement, said that Koirala’s death had stunned the association. "We have lost our parent, who always remained helpful and guided the NRNA in its movement," he is quoted in the statement. "Koirala’s demise has caused an irreparable loss to the nation."

Sunday, February 7, 2016

Public transport fares slashed, albeit nominally

Department of Transport Management has today slashed the public transport fares, albeit nominally that is unlikely to benefit the commuters.  The new fare will come into effect from tomorrow, according to the department.
But the fare cut will not benefit the Kathmanduits. With the reduction in transport fare, minimum transport fare in the Kathmandu valley will remain unchanged at Rs 13 and maximum will be Rs 24. Similarly, fare distance of up to 16 km also remains unchanged. Fare for trips between 16 km and 25 km will come down by Re 1 to Rs 24 from Rs 25. Similarly, passengers will have pay Rs 5 less for every 100 km. The price rate of taxi per km will be Rs 35, a reduction of Rs 1 per km from earlier.
The fares have been reduced by 2.53 per cent in public transport, 1.65 per cent in taxis and 3.76 per cent in Hill cargo and 3.28 per cent in Tarai cargo transport, according to the department.
Likewise, the fare for Kathmandu-Narayanghat-Hetauda has come down to Rs 412 from existing Rs 423, while travelling from Kathmandu to Birgunj or Birgunj to Kathmandu will cost Rs 491, down from Rs 504.
Ministry of Physical Infrastructure and Transportation approved the department's decision to cut the fare today afternoon.
Last week, Office of Prime Minister and Council of Ministers had directed the department to reduce transport fare in line with plummeting fuel prices. When the government last revised the transport fares on September 10, 2015, petrol sold at Rs 104 and diesel at Rs 81 per litre compared to the recent price of Rs 99 and Rs 75, respectively.
Though, the government officials claimed that the new adjustment is scientific, the fare has been reduced on the basis of falling fuel price only. "We have reduced the fare on the basis of Scientific Fare Determination Mechanism," director at the department Mukti KC said.
Fuel carries 35 per cent weightage in the fare adjustment process. Other factors like salary/allowance of drivers/staff, price of spare parts, maintenance, battery, and depreciation, among other indicators, carry 65 per cent weightage.
"The Scientific Fare Determination Mechanism permits us to revise transportation fare only, if price of fuel goes up or down by at least Rs 5 per litre," he said, adding that they have adjusted the new fare as price of petrol and diesel has lately gone down by Rs 5 and Rs 6 per litre, respectively.
However, consumer rights groups claim that passengers do not benefit also because of weak monitoring and implementation by the government side. "The transporters' syndicate is stronger than the government," they claimed, adding that the transporters also have political patronage that the consumers donot have.
But, the government officials – as usual – reiterate that they 'will adopt effective monitoring mechanism and will take action against overcharging transporters."

Thursday, February 4, 2016

Visionary industrialist Lunkaran Das Chaudhary passes away

Visionary industrialist Lunkaran Das Chaudhary, 93, passed away today afternoon at Norvic Hospital. He was suffering from heart ailment and diabetics. He is survived by his three sons – Binod Chadhary, Basanta Chaudhary and Arun Chaudhary – and a daughter Kusum Agrawal.
The founder of the Chaudhary Group, which is the only Nepali company that has made it to the Forbes' list of billion dollar companies, Lunkaran Das is viewed as the pioneer of international trade and industralisation in Nepal.
According to the president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka, he is one of the last entrepreneurs, from the Marwadi community, who envisioned that the private sector could be a part of Nepal's economic development. "He was a religious man and an honest entrepreneur," he added.
One of the foremost figures to promote trade and commerce in the country, Lunkaran Das expanded his family business of trading to jute and spinning mills, stainless steel production and construction.
Lunkaran Das started his long and successful journey as an industrialist by literally trailing his father Bhuramull Chaudhary to the royal palace, residences of royal families and Rana rulers where the duo used to sell textiles and saris imported from India, according to a book by his son Binod Chaudhary. He was only eight or 10 at that time, the book reads, adding that "In those days, outsiders, especially males, were not allowed to enter the rooms of female members in the royal palace. But Lunkaran Das used to get access because of his age. And once he went inside with saris and textiles, the queens and female members of the royal family never disappointed him."
According to the book, Bhuramull finally stopped wandering door to door to serve his clients when the then Rana Prime Minister Juddha Shumsher allowed him to open a store in New Road. The permission was granted acknowledging the benevolent attitude of the Marwadi community towards the victims of the devastating earthquake of 1933.
Soon, New Road saw a new store Bhuramull Lunkaran Das Chaudhary. The opening of this textile store laid the foundation stone for creation of a business empire called Chaudhary Group, now one of the country’s leading business houses with around 40 companies under its wing.
Born at Makhan Tole in Kathmandu, Lunkaran Das took over the business at the age of 23, after the demise of his father Bhuramull Chaudhary. At the time when Lunkaran Das lost his father, he had only a family store. But then he started jute business and also exported  to India and Europe via Biratnagar. Later, he opened the first branch of Bhuramull Lunkaran Das Chaudhary in Biratnagar. Soon, he also started importing textile from Japan and Korea.
While the trade of imported textile was flourishing, Lunkaran Das decided to diversify his business and enter into construction sector, an area in which he had no prior experience.
He embarked on this journey by securing a sub-contract for construction of Kathmandu-Trishuli road section. According to the book, the road to Trishuli led Chaudhary Group to today's status. "Later, he also secured the contract to build Soaltee Hotel," the book further adds.
At a time when the government was pushing for industrialisation, Lunkaran Das was instrumental in establishing Biratnagar Jute Mill, Modern Hosiery, Nepal Spinning, Ratna Stainless Steel, Flooring and Furnishing and United Builders, among others, which inspired the growth of private sector in Nepal. He is also credited for opening a departmental store 'Arun Emporium' in 1968 – some 50 years ago – in Nepal. Lunkaran Das also later founded the first flooring and furnishing store that used to cater to the needs of interior decoration of embassies and royals.
Lunkaran Das has many firsts to his credit establishing not just new business entities but also founding institutions for strengthening the private sector. He was founding member of FNCCI, Nepal Chambers of Commerce (NCC) and Marwadi Sewa Samiti, among others.
According to NCC president Rajesh Kazi Shrestha, Lunkaran Das was a benign industrialist, who envisioned the private sector role in Nepal's economic development.
"He also believed that a strong private sector could help in rapid economic development of a country and create a prosperous nation,” added Murarka.

Prime Minister's Office directs NOC to reduce fuel price

The government has directed Nepal Oil Corporation (NOC) to reduce fuel prices instantly in line with the decline in crude oil price in the international market. Similarly, the Department of Transport Management (DoTM) – through Ministry of Physical Infrastructure and Transport – has also been directed to reduce public transportation fares. Stating that Nepali consumers have not been benefitting from the significant declines in international oil price, the Office of the Prime Minister and Council of Ministers (OPMCM) today wrote separately to the NOC and DoTM to slash fuel prices and revise public transport fares accordingly. The OPMCM spokesman Uttam Kumar Khatri confirmed that the office has written both the entities letters to slash the prices accordingly.
The office has, however, not clarified what action it would take, if the state entities not follow its directives. Earlier too, the office used to issue directives but the state entities are not responsible to either state or people.
Despite continuous drop in crude oil prices in the international market, the Nepal Oil Corporation (NOC) has not adjusted fuel prices downwards citing shortage of the petroleum products.
Though the crude oil price plunged to a 12-year low of $32 per barrel in the international market in January second week, Nepali consumers have not been able to benefit from it as the responsible bodies did not slash the fuel prices and transport fares, accordingly.
"While NOC has not reduced fuel price according to the declining crude oil price in the international market, the DoTM also has not reduced public transport fares,” said Khatri.
Earlier on January 18, NOC had reduced the prices of petrol and diesel by Rs 5 per liter and Rs 6 per liter, respectively, despite the automatic pricing system it adopted since almost a year ago. Currently, petrol costs Rs 99 and diesel and kerosene cost Rs 75 per liter, respectively.
Meanwhile, student unions affiliated to various political parties today organised a sit-in protest in front of NOC demanding smooth supply of petroleum products and action against the black-marketeers of petroleum products. Student unions affiliated with three Maoist parties – UCPN-Maoist, CPN-Maoist (Revolutionary) and CPN-Maoist – had staged sit-in protest in front of NOC's central office at Babarmahal in the afternoon. The NOC has been encouraging illegal import of petroleum products after Indian blockade – since September – that halted supply of fuel from the Indian Oil Corporation (IOC). The IOC that is the only supplier of fuel to NOC refused to supply essential fuel – despite the agreement between NOC and IOC to supply uninterrupted fuel – saying that it has no orders from Indian government to supply oil.
Likewise, the student unions have also demanded NOC to adjust fuel price in line with the decline in international crude price. They have also demanded that the NOC adopt long-term policies regarding production, supply and storage of petroleum products and end the ongoing crisis immediately.
Crude prices have been plummeting in the international market continuously since last four months but the state oil monopoly has not been revising the prices downwards, instead it has separted a huge chunk from its profits for bonus. The technically bankrupt NOC srill has to pay Rs 12 billion loan to the government. Earlier, it had Rs 32 billion loan last fiscal year.