Tuesday, January 24, 2017

Maintain fuel storage to meet 90 days' demand, PM tells NOC

Prime Minister Pushpa Kamal Dahal has directed the officials concerned to maintain storage of petroleum products to meet the demand for 90 days.
Speaking at a meeting with the officials of the Supplies Ministry, Finance Ministry and Nepal Oil Corporation (NOC) at his office today, Dahal assured that the government would provide necessary budget to build petroleum storage facilities. He also directed the officials to extend the Raxaul-Amlekhgunj petroleum pipeline up to Chitwan.
On the occasion, officials of the Ministry of Supplies officials requested the PM to allocate Rs 57 billion for building petroleum storage facilities. "The total cost of expansion of petroleum storage facilities is estimated at Rs 117 billion," briefed supplies minister Deepak Bohara to the Premier on the occasion. "The government should provide us Rs 57 billion as we don't have sufficient budget to build storage facilities," he said, adding that the ministry sought budget as the NOC is planning to build one storage facility in each of the seven provinces. "The NOC is planning to build storage facilities under public-private partnership."
The budget includes both for building of petroleum storage infrastructure to cater the demand of at least three months and also to purchase petroleum products – petrol, diesel, kerosene, LPG – that will remain in stock for the same period.
The Finance Ministry has also principally agreed to support Supplies Ministry to expand petroleum storage facility by releasing the required budget.
Nepal currently has reserve capacity of 5,184 kilolitres (kl) petrol, 42,400 kl diesel, 15,500 kl kerosene and 8,500 kl aviation turbine fuel (ATF). This storage is able to fulfil the domestic demand for three to four days. If fuel storage capacity is to be increased targeting three month’s consumption in Nepal, the current reserve capacity of petrol has to be expanded to 135,000 kl and that of diesel to 405,000 kl, according to NOC.
Similarly, reserve capacity of kerosene and ATF has to be upgraded to 5,100 kl and 60,000 kl, respectively. Also, LPG reserve capacity has to be increased to 120,000 metric tonnes to meet three month’s demand.
As NOC's existing storage facility can meet the demand of few weeks only, long queues can be seen in petrol pumps, if fuel supply is affected for even a day.
While NOC has sought Rs 57 billion for build petroleum facilities, it is preparing to distribute Rs 1.14 billion worth of bonus to its staffers. A source at the NOC said that the petroleum monopolist was preparing to distribute after the corporation became debt-free this year.
Last year, NOC had set aside Rs 900 million to distribute bonus among its staffers.
However, its plan could not materialise as the Finance Ministry and Supplies Ministry directed it to repay the loans first. This time around, NOC has allocated Rs 2 billion for bonus. But it knocks the doors of the government whenever, if faces loss.
Likewise, NOC also collects millions of rupees from customers in the name of Infrastructure Fund. But it does not spend the amount thus raised for infrastructure development rather has been paying government loan to become debt-free so that it can distribute bonus to the staffers.

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