NOC refuses to reduce fuel prices citing losses

The state oil monopoly increases the price of fuel, if the price goes up but doesnot decrease the price, if it comes down, and claims to be implementing automated pricing system.

And its not for the first time, the Nepal Oil Corporation (NOC) has been doing this. On several occasions, the NOC has not reduced the price, when the price in the international market came down, but increased the price once it witnessed a rise in the international market.

The NOC get its price list twice a month from its sole supplier Indian Oil Corporation (IOC). The automated pricing system came into practice to adjust the price in the domestic market on the basis of the price list the NOC gets from IOC. But this time also, the NOC refused to reduce the price of petroleum products despite buying at cheaper rates from IOC.

Issuing a press note today, the NOC claimed that it is in no state to decrease prices as its accumulated losses have reached Rs 27 billion. But last month, the NOC posted a fortnightly profit of Rs 180 million.

“The corporation is unable to reduce the price according to the new price list it received on November 1, due to fluctuations in the price of petroleum products in the international market,” the press note reads, claiming that it has been operating at a loss for a long time. 

According to new price list sent by supplier IOC, the price of LPG – popularly known as cooking gas – has gone up, while the prices of petrol, diesel, aviation fuel and kerosene have gone down. 

According to the oil monopoly’s press note, the corporation will incur a loss of Rs 368.5 million in 15 days only from the sale of LPG. On the contrary, the corporation will make a profit of Rs 580 million in 15 days from the sale of petrol, diesel, aviation fuel and kerosene.

The ‘bankrupt’ NOC has been, however, blamed of funding political parties, and bigwigs at the cost of people, as according to senior bureaucrats. One of the managing directors (MD) of the NOC, Lok Krishna Bhattarai had refused to share the NOC’s profit with royal palace, almost two decades ago, and resigned. “The tradition still continues, though the royal palace has been replaced with political parties,” claims the retired officials of the NOC that has been a ‘milking cow’ for every political parties.