Thursday, February 4, 2016

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.

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