NOC hike petro prices

The state fuel monopoly has increased the price of petroleum products including diesel, petrol and kerosene.

The price of fuel has been increased by Rs 3 per liter to take the retail price of diesel and kerosene at Rs 175 per liter and of petrol to Rs 178 per liter, confirmed a press note issued by the Nepal Oil Corporation (NOC). 

The new price will come into effect from today midnight. The price of aviation fuel and LPG – popularly known as cooking gas – remains unchanged, the press note reads, adding that the price of petroleum products had to be increased due to the increase in the price of petroleum products in India.

A fortnight ago, when the petro price has come down, the state fuel monopoly did not recude the price but the price has been jacked up as soon as the price increased, showing double standard in price adjustment.

The NOC refused to reduce the fuel prices last fortnight, when the price has come down, citing its regular losses. Last year too, the NOC denied decreasing the fuel prices citing losses, though it repeatedly claims to have implemented automated pricing system.

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.

NOC projects profits

After almost one-and-a-half year, the bankrupt state oil monopoly has projected a profit of Rs 1.60 billion per month after a successive drop in the crude prices in the international market.

According to Nepal Oil Corporation (NOC), it now makes a profit of Rs 6.45 per liter in petrol and Rs 12 per liter in diesel at the new price rates sent by IOC on October 1. IOC sends price list every fortnight on the 1st and 15th of the Gregorian calendar.

Last March, the oil price in the international market reached as high as $125 per barrel, while it came down to $86 per barrel last week. Indian Oil Corporation (IOC), the sole supplier to the NOC has also decreased the price of fuel but the NOC has not been bringing the fuel price down, though it claimed to implement the automated price system. “The NOC has been misusing the automated price system as it increases the price of fuel when the price list sent by IOC increases but it has not been decreasing the price, when the price list has lower price,” complained the consumer rights activists. 

The NOC has been claiming that it has borrowed from the government to pay the IOC, and it owes around Rs 40 billion to various government bodies.

NOC suggests to implement quota on fuel purchase

The bankrupt state oil monopoly has again recommended the government to implement the already failed two-day weekly off and quota in fuel purchase.

Citing shortage of funds to pay to the Indian oil Corporation (IOC) amid soaring financial loss, Nepal Oil Corporation (NOC) today wrote a formal letter to the Prime Minister, Industry and Commerce Minister and Home Minister, and suggested to re-implement the two-day weekly holiday, and apply quota on fuel purchase.

Among the 10-point suggestions, the NOC wrote the government to curb the purchase of maximum 5 litre of petrol to the two-wheelers, and 20 litres to the four-wheelers, apart from enforcing an odd-even system on vehicle use. Likewise, it has asked the government to ban the import of the fuel-operated vehicles, restrict the use of vehicles on holidays, and promote the walking culture for short distance, in order to check the rising fuel import. The NOC has also suggested the government to encourage the use of electric vehicles and set up charging stations along the national highways, and various places to make people easy to charge their electric vehicles.

NOC claimed that its outstanding dues to the IOC, it sole petroleum products’ supplier, has reached Rs 22 billion, which could cross Rs 30 billion from July 8. “While the monthly loss of NOC now stands at Rs 10 billion, the cumulative loss will reach Rs 55 billion by the end of this fiscal year,” the NOC letter reads.

The ongoing war between Russia and Ukraine has disturbed the smooth supply of fuel pushing its price to historic high in the international market. According to NOC, its loss amount is increasing as it is unable to adjust the fuel price in the line of the prices in the international market.

Nepal imports more than 200 billion worth petroleum products annually, from India. As the country’s largest import petroleum products’ bill is much larger than the total export earnings of the country, the NOC has long been pushing the government to implement a number of measures to check rising consumption of petroleum products, and also to reduce its losses.

Nepal Oil Corporation jacks up fuel prices to record level

Nepal Oil Corporation (NOC) has increased the prices of petrol by Rs 21 to Rs 199 per liter and diesel and kerosene by Rs 27 to Rs 192 per litre, effective from midnight.

This is the highest increment ever made by the state oil monopoly, as the bankrupt NOC failed to pay its sole supplier.

Likewise, the corporation has also increased aviation turbine fuel (ATF)-domestic by Rs 19 to Rs 185 per liter, and ATF – international by $100 to Rs $1,645 per kiloliter.

The price of the Liquefied Petroleum Gas (LPG), popularly known as cooking gas, has not been hiked, though it also incurs loss, according to the NOC that has been incurring losses despite the rise in the petroleum prices. The corporation said that it is incurring a loss of Rs 2.28 billion in LPG alone. A cylinder of LPG now costs Rs 1800.

Claiming that it has hiked the prices of petroleum products in line with the international price, the corporation said it is still facing an extreme financial crisis. The NOC will have Rs 22 billion due to be paid to Indian Oil Corporation (IOC) for the purchase of petroleum products by June 23.

Despite the hike, the corporation will be facing a monthly loss of around Rs 4.70 billion, it claimed, adding that the accumulated losses have been expected to reach Rs 55 billion by June end.

The continuous rise in the price of petroleum products has pushed the inflation up, beyond the control of the government and central bank.

According to Nepal Rastra Bank (NRB), the year-on-year consumer price inflation jumped to 7.87 per cent in May, hitting a 69-month high.

The Russia-Ukraine war has affected the international fuel market forcing the global market adjust price. On Thursday (June 16), the sole supplier of fuel to the NOC, IOC had sent an increased price list. According to the new price list sent by IOC on Thursday, the price of petrol, diesel and aviation fuel was increased by Rs 6.52, Rs 19.3 and Rs 91.91 per liter, respectively.

Price of petrol, diesel down, cooking gas up

Nepal Oil Corporation (NOC) has reduced the price of petrol, diesel and kerosene by Re 1 per litre, each effective from tonight.
The state oil monopoly has but increased price of Liquefied Petroleum Gas (LPG) – popularly known as cooking gas – by Rs 25 per cylinder, according to the NOC. “With these adjustments, price of petrol will cost Rs 110 per litre, while price of diesel and kerosene will cost Rs 99 per litre each,” the NOC spokesperson Birendra Goit said, adding that the cooking gas will cost Rs 1,375 per cylinder. “The fuel prices have been revised in line with prices of petroleum products determined by Indian Oil Corporation (IOC) for February.”
The IOC sends petroleum price every fortnight, according to the international price fluctuation. The domestic price is however, depended on the price list the IOC, which is the sole supplier of the petroleum products to NOC.

NOC jacks up petrol, diesel, kerosene prices by Rs 2 per litre

Though, the price of petroleum products have been decreasing in the international market, the state oil monopoly has increased the price of petrol, diesel and kerosene by Rs 2 per litre effective from midnight.
Nepal Oil Corporation spokesperson Birendra Goit confirmed that petrol will cost Rs 109 per litre, while the price of diesel and kerosene has been adjusted to Rs 97 per litre effective from tonight. “The prices were adjusted with the increase in fuel prices in the internal market.”
The NOC, however, claimed that the raise in retail prices of petrol, diesel and kerosene is in line with the revision in the price list forwarded by the Indian Oil Corporation (IOC) – the sole supplier of petroleum products to Nepal.
The NOC increased the prices of petrol, diesel and kerosene nearly three months after lowering their price. Earlier on September 10 – coinciding with the formal launch of the India-Nepal cross border petroleum pipeline (Motihari-Amlekhgunj – it had lowered the price of petrol, diesel and kerosene by Rs 2 each.
On September 20 again, the NOC has slashed the price of liquefied petroleum gas (LPG) – popularly known as cooking gas – by Rs 25 to Rs 1,350 per cylinder. Likewise, it has also lowered the price of ATF by $50 to $1,000 per kiloliter (kl) as an incentive for international airlines on the eve of Visit Nepal Year 2020 (VNY2020) campaign, and also in the wake of growing complaints from airlines companies that the fuel in Nepal was very expensive.

Fuel price for international airlines slashed by $50 per kiloliter

The state oil monopoly has slashed the price of aviation turbine fuel (ATF) by $50 per kiloliter (kl) for international carriers, according to the Nepal Oil Corporation (NOC).
Now, the price of the ATF for international carriers stands at $1,000 per kl, down from $1,050, according to NOC spokesperson Birendra Goit, who said that the price of the ATF for international carriers has been lowered to help in making the Visit Nepal Year 2020 a success.
The NOC brought the price of ATF down as the tourism and international airlines companies complained that the jet fuel price is too high in Nepal, distracting the tourists, he said, adding that international airlines have long been complaining that the price of the ATF is very high in Nepal which has not only been a factor of high airfare but also discouraging to add more flights.
The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) was also urging the Ministry of Industry, Commerce and Supplies to lower the price of the ATF in line with the demands of the international airlines and tourism entrepreneurs. But the international airlines companies say that the reduction in the price is very low.
According to Goit, the NOC has been using the profit earned from the high ATF price to subsidise the losses that it incurs in other petroleum products.
Likewise, the NOC has also lowered the retail price of Liquefied Petroleum Gas (LPG) by Rs 25 per cylinder yesterday to Rs 1,325 to be effective from today midnight. “The NOC decided to revise down the price of LPG yesterday and brought into effect from today midnight,” he said, adding that the price of the LPG is, however, lowered only for the Kathmandu valley.
According to a press note issued by the NOC, it has decided to lower the price of the LPG – popularly known as cooking gas widely used by households in Nepal – after it got the revised the rate from the Indian Oil Corporation (IOC), the sole supplier of petroleum products to Nepal.
Earlier on September 11, the NOC has reduced the price of diesel, petrol and kerosene by Rs 2 per liter coinciding with the formal launch of the India-Nepal cross border petroleum pipeline from Motihari to Amlekhgunj.

Sundar Yatayat inaugurates electric vehicle charging station

A private transport service provider has started operation of charging station here in the capital today.
Energy secretary Dinesh Kumar Ghimire inaugurating the charging station of Sundar Yatayat at a programme said the government is gradually reducing the import of petroleum products and increasing the use of electricity produced in the country.
Sundar Yatayat is also planning to operate four electric buses in the capital from September 9.
After the government brought a policy to encourage electric vehicles, the private sector has also started operation of the charging station for electric to address the government policy.
Likewise, chairman of Sundar Yatayat Bhesh Bahadur Thapa, on the occasion, said that six vehicles can be charged at one time at the charging station that has come into operation from today. “A bus plying on the Ring Road consumes fuel worth Rs 4,000 daily, whereas an electric vehicle uses electricity worth only Rs 700,” he said, adding that it makes transportation by electric vehicle cheaper and smoother. “The arrangement has been made to charge an electric bus for a fee of Rs 4.20 per unit of electricity.”
The government has brought the policy of operating electric vehicles in the major cities including the capital Kathmandu and also displacing the LP Gas used at the household level for cooking by electricity. Apart from more than a dozen projects developed by the private sector including Rasuwagadhi and Sanjen, mega projects like Upper Tamakoshi will be completed by the end of the current fiscal year, which will help generate surplus energy.

LP Gas Industry warns of protest

Nepal Liquefied Petroleum Gas (LPG) Industry Association – organising a press meet today – warned of a protest, if their demands are not met at the earliest. The association said that it will halt collection of LPG product delivery order (PDO) from Nepal Oil Corporation (NOC) from March 1, if their demands are not met.
Similarly, issuing a 10-point demand the association warned that it would launch a protest if the government did not fulfil them within 10 days. It said they would completely halt the supply of gas from March 14.
The The Nepal LPG Industry Association (NLGIA) has been demanding allowance for the operation of Nepali private number plate gas bullets, revision of the commission on LPG, quota determination for LP gas and uniformity in the price of cooking gas. Likewise, they have also been demanding insurance for LPG-related accidents and timely amendment to the LP Gas Regulations, 2065.
"We have invested billions of rupees to purchase LPG bullets and dozens of such bullets are ready for delivery," NLGIA president Gokul Bhandari said, adding, "However, Nepali bottlers have not been able to use these bullets due to lack of non-explosive certificate."
The association – condemned the government for failing to facilitate gas bottling plants to acquire ‘non-explosive’ certificate from Indian authorities, which enables LPG bottlers to use their own bullets to transport cooking gas from India to Nepal – has announced a series of programmes to protest the 'government’s inaction' to resolve problems facing the LPG industry.
Likewise, the NLGIA has also demanded that the government raise commission on LPG for both bottlers and distributors. Currently, NOC is providing commission of Rs 30.55 per cylinder to bottlers and Rs 32 per cylinder to distributors.
It has also been asking the Ministry of Industry, Commerce and Supplies (MoICS) – since September – to conduct a study on challenges facing the LPG industry as promised by the government.
"The government had promised to conduct a study on contemporary challenges facing the LPG industry and address them gradually five years ago," Bhandari said, adding that the government apathy towards the industry has humiliated them. According to Bhandari, the ministry had formed a committee led by former National Planning Commission (NPC) member Puskar Bajracharya in 2013 to provide recommendations on the amount of commission that should be paid to bottlers. "The panel had recommended a commission of Rs 52 per cylinder, but it was slashed to Rs 19," Bhandari added.
Bottlers also expressed concern over NOC issuing licences to new bottling firms. There are 56 gas bottlers in the country currently. "Most of these companies are operating at 40 per cent capacity," he said, adding that Nepal imports 35,000 tinnes to 40,000 tonnes of cooking gas per month. Demand for the fuel is growing at the rate of 17 per cent per annually, according to NOC.

Fuel prices to come down further

Nepal Oil Corporation (NOC) has reduced the price of petrol and diesel by Rs 2 per litre.
The state-owned fuel monopoly has revised prices of petrol, diesel and kerosene downwards by Rs 2 per litre, according to the spokesperson of the NOC Birendra Goit. He said that the new price will be effective from tonight.
"Following the price cut, petrol will now cost Rs108 per litre, while diesel and kerosene will cost Rs 97 per litre each," he said, adding that the NOC has, however, not revised the price of aviation fuel and Liquefied Petroleum Gas (LPG), popularly known as cooking gas.
The NOC attributed the drop in price to falling fuel prices in the international market.
Earlier on December 3, the NOC had slashed the prices of petrol, diesel and kerosene by Rs 2 per litre. NOC has already reduced fuel price twice in the last one month – on December 3 and 18 –owing to fall in price in the international market. NOC has adopted automatic pricing system to adjust price of petroleum products according to the international price, and adjust the price fortnightly.
The Indian Oil Corporation (IOC) – the only supplier of fuel to NOC – has reduced fuel prices for NOC for the first half of January. The fuel prices are likely to go down further in the domestic market owing to the constant fall in their prices in the international market.
The global crude oil price has been constantly falling since the last two months. Though average price of crude oil was above $70 per barrel in October, its price has dropped to almost $53 per barrel at present.
Though NOC had been incurring a monthly loss of over Rs 1 billion a month ago, but after the price adjustment, the corporation currently books monthly profit of more than Rs 1.5 billion.

NOC slashes fuel prices

The continuous fall in the prices of fuel in the international market has pushed the fuel price in the domestic market down too. Nepal Oil Corporation (NOC) has – effective from tonight – revised the fuel prices downwards by Rs 2 per litre. "The NOC has reduced the retail prices of petrol, diesel and kerosene by Rs 2 per litre," informed spokesperson of the state utility Birendra Goit. "After the revision, a litre of petrol will now cost Rs 112 while diesel and kerosene will cost Rs 99 per litre," he said, adding that the petrol and diesel are in profit, even after decreasing the price. "However, the NOC still incurs Rs 288 loss in a cylinder of LPG – popularly known as cooking gas – though the corporation is profiting in other petroleum products including petrol, diesel and kerosene.
The NOC revises the price of fuel, according to the price list sent by its sole supplier Indian Oil Corporation (IOC) that sends the price list, twice a month on the first and 15th of the Gregorian calendar.
However, this is the first time, the NOC has reduced the fuel price after the incumbent government led by Prime Minister KP Sharma Oli came to power months ago.

Prices of petro products hiked for the fourth time after Oli took charge

The state oil monopoly has hiked the prices of petroleum products for the fourth time after incumbent Prime Minister K P Oli took the power more than three months ago.
Nepal Oil Corporation (NOC) has jacked up Rs 2 per litre in petrol, diesel and kerosene each within a distance of 15-kilometre from Thankot depot in Kathmandu Valley from today midnight, the NOC spokesperson Birendra Goit confirmed, adding that the petrol will cost Rs 110 per litre and diesel and kerosene will cost Rs 92 in the Kathmandu Valley, according to the new revised rate. "However, petrol will cost Rs 109.50 per litre in Dang and Pokhara, and Rs 108.50 per litre all over Nepal except Kathmandu Valley, Dang and Pokhara."
Likewise, diesel and kerosene will each cost Rs 92 per litre within 15-km distance from Thankot depot in Kathmandu Valley and Rs 91.50 per litre in Dang and Pokhara respectively, he added, "Diesel and kerosene will be available at Rs 90.50 except in Kathmandu Valley, Dang and Pokhara."
The NOC has, however, not increased the price of Liquefied Petroleum Gas (LPG) – popularly known as cooking gas – and aviation fuel. A cylinder of cooking gas remains static at Rs 1,375 and Air Turbine Fuel (ATF) domestic has also remained at the same price that is Rs 95 per litre.
“With the revised rate, the NOC reaches break-even point," Goit said, adding that it would otherwise have suffered Rs 320 million loss per month.
The Indian Oil Corporation (IOC) – the only supplier of the petroleum products to Nepal – sends NOC revised price list every fortnight. The price of petroleum prices in theh international market has gone up, forcing the IOC to revise the rate upwards every fortnight.
Earlier, the state oil monopoly had increased fuel prices on May 3, April 16, February 19 and February 2, though this is the eighth time that the NOC has revised the fuel prices this year.
The price of petroleum products seems to go even up forcing the otherwise controlled inflation to look up. It will make the government and central bank difficult to tame the inflation under 7 percent as targeted in the fiscal and monetary policy.
The hike in petroleum products – especially diesel – will push the price of the good up due to increased transportation cost fueling the inflation. 

NOC hikes petro price

Nepal Oil Corporation has jacked up price of petroleum products effective from midnight.
According to NOC spokesperson Birendra Goit, the corporation has increased Rs 2 per litre in petrol, Rs 1.50 per litre in diesel and kerosene, and Rs 25 per cooking gas cylinder. "As per the new price, petrol will be available on Rs 100, diesel on Rs 75.50 and a cooking gas cylinder on Rs 1350," he added.
Since Nepal has been importing petroleum products from the Indian Oil Corporation (IOC), NOC fixes price of the petroleum products based on price list sent in by the IOC on 1st and 16th of every Gregorian month.
The government owned oil monopoly said that it has increased the price of petrol, diesel and kerosene and liquefied petroleum gas – popularly known as cooking gas – today as the price of the crude oil in the international market has seen increament. "We had to adjust the prices of other products due to increment in prices in the international market," he added.
NOC has, however, has not changed the price of aviation fuel. 
Even with the increment in the price of petroleum products, NOC will make profit of only Rs 19.70 million due to heavy loss in cooking gas, the NOC claimed, adding that it bears Rs 115 million loss per month even after implementation of the new rate.
Though, NOC has adopted automatic pricing system to adjust price of petroleum products according to the international price, it has not changed the fuel price since February.

Cooking gas price down by Rs 25 per cylinder

Nepal Oil Corporation (NOC) has reduced the price of Liquefied Petroleum Gas (LPG) – popularly known as cooking gas – by Rs 25 per cylinder.
A cooking gas cylinder will now cost Rs 1,325 per cylinder, according to the state-owned petroleum monopoly. "The new price will come into effect from Wednesday."
With the new price, NOC still earns a profit of Rs 74.90 on sales of every cylinder of LPG. According to the NOC, the Indian supplier has reduced the price of cooking gas by Rs 54 per cylinder.
The decision is expected to give some respite to consumers, NOC spokesperson Sitaram Pokhrel said, adding that the decision to adjust the price downwards was based on price in the international market that has been continuously coming down in recent month.
Pokharel said that the NOC revised the LPG price after Indian Oil Corporation (IOC) – the sole supplier of petroleum products to Nepal – reduced the price. "However, prices of other petroleum products have remained unchanged, as according to Pokharel, IOC has raised prices of rest of the petroleum products this time. "It will cause the NOC's projected profit to drop to Rs 620 million per month from Rs 800 million."
The Indian supplier has raised the price of petrol by 1.08 per litre and that of diesel by 48 paisa per litre. Also, kerosene price has gone up by Rs1.10 per litre and air fuel has become costlier by Rs1.14 per litre.
According to the revised prices, NOC will earn a profit of Rs 4.84 on sales of every litre of petrol and Rs 17.13 on sales of every litre of kerosene. It will, however, suffer a loss of Rs1.18 on sales of every litre of diesel. Likewise, the NOC will earn a profit of Rs 9.16 on every litre of fuel sold to domestic airlines and Rs 20.29 on every litre of fuel sold to the international airline companies.
Last month too NOC had reduced petroleum prices.

NOC revises petroleum prices downward, still makes hefty profits

Nepal Oil Corporation (NOC) has slashed petroleum products' prices effective from midnight. But state-owned petroleum monopoly is still making hefty profits.
The NOC has reduced price of liquefied petroleum gas (LPG) – popularly known as cooking gas – by Rs 25 per cylinder, domestic aviation fuel by Rs 4 per litre, whereas petrol, diesel and kerosene prices dropped by Rs 2 per litre.
After the downward price revision, a cooking gas cylinder will cost Rs 1,350, but the NOC is till making profit on every cylinder of LPG.
Despite the new price drop, NOC has projected that its monthly profit will stand at more than Rs 800 million.
Similarly, petrol will cost Rs 98 per litre, whereas diesel and kerosene will each cost Rs 74 per litre. Air turbine fuel (domestic) has been reduced by Rs 2 per liter for domestic airlines and by Rs 4 liter for international airlines to Rs 84 per liter (domestic) and Rs 73 (international). The domestic airliners will reduce surcharge on air fares, though the public transportation – run by both petrol and diesel will not reduce the fair.
The NOC has revised the fuel prices downwards based on the new price list that it received from Indian Oil Corporation (IOC) – the sole supplier of petroleum products to Nepal – according to the NOC spokesperson Sitaram Pokharel. He said that the Indian supplier had lowered the price in the new price list that was sent to NOC on July 1. The NOC receives the new price list fortnightly.
The fuel monopoly has reduced the price after facing criticism for not lowering price despite the drop in fuel price in the international market. It had slashed prices two weeks ago, though the price of cooking gas remained unchanged then citing loss.
 Though the NOC had claimed that it has adopted auto pricing system – based on IOC price every fortnight – it has not been regularly adjusting the prices claiming the loss it had incurred in the past.
The state-owned fuel monopoly had also claimed that lower prices in Nepal would promote fuel smuggling at the Nepal-India border. Due to huge profits it has been making, it has however separated profits for bonus, despite huge public pressure not to 'socialise the loss and privatise the profit.'
"US crude futures have slumped about 15 per cent so far this year to about $46 per barrel, and as of Friday, ended its worst half-year performance in 19 years,” according to the international market that reported that an agreement between the Organisation of Petroleum Exporting Countries (OPEC) and other producers to cut output had kept oil prices stable in the last few months. But OECD total oil inventories are still above 3 billion barrels due to an unexpected recovery in Libyan and Nigerian supplies and a rebound in US shale production.

NOC can import LPG from other countries

Nepal will be able to import cooking gas from countries other than India very soon.
A new clause is being inserted in the petroleum supply agreement to be signed between Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC), which is due for renewal this month.
"As the demand for cooking gas has been increasing by 20 per cent annually in India, we are including a provision that allows Nepal to import liquefied petroleum gas (LPG) from other countries as well," deputy executive director of NOC Sushil Bhattarai said at a meeting of Industry, Commerce and Consumer Welfare Committee of the parliament today. He also said that the IOC has also agreed to include such provision in the agreement. "The agreement after renewal allows Nepal to import cooking gas from other countries," he added.
Nepal currently imports around 30 tonnes of LPG from India every month.
Speaking at the meeting, NOC managing director Gopal Khadka said that the draft agreement also includes a provision that allows NOC to buy crude oil and give it to Indian refinery for processing, should IOC fail to supply fuel to Nepal as per the demand. However, NOC failed to incorporate the provision of compensation, in case IOC fails to maintain the smooth supply of petroleum products like last year during the Indian blockade for nearly six months.
The parliamentarians, on the occasion, directed the NOC to include a provision of compensation in the new Supply Agreement – since it is a commercial agreement – that would require IOC to compensate NOC at times of supply disruption from the IOC side.
"The new Supply Agreement should be signed in such a manner that it ensures uninterrupted supply from IOC to Nepal even during difficult times," coordinator of sub-committee Subash Chandra Thakuri said, adding that provision of compensation in the agreement itself will compel IOC to make supply regular.
NOC had not only incurred huge financial loss – amounting to billions of rupees – due to almost six months-long disruption in supply of petroleum products to Nepal from IOC last year, but the economy also suffered.
The NOC had then also written a letter to IOC seeking compensation for the financial loss that it incurred due to fuel supply disruption. The IOC had, however, remained mum back then.
The sub-committee also directed NOC to keep enough space in the agreement that would allows NOC to sign commercial petroleum deal with other nations and import fuel from other sources at times of difficulties. "Along with IOC, NOC also should sign commercial petroleum deals with other feasible nations,” Thakuri said, directing NOC to expedite the process of signing commercial fuel deal with China.
Though NOC and PetroChina of China had signed a memorandum of understanding a year ago to engage in commercial petroleum deal, they have not been able to materialise the historic deal that would break IOC’s monopoly in petroleum supply to Nepal.
A team from IOC had visited Kathmandu last week to hold discussion with the NOC team on the new agendas that are being included in the agreement.
The existing agreement was signed in 2012.
After the Indian blockade that ran for nearly six months, NOC is under pressure to include some provisions, including allowing Nepal to import petroleum products from other countries, compensation to NOC, if IOC failed to supply petroleum products as per the demand, in the draft. But the draft has not included these provisions, despite pressure from all quarters.
Addressing the meeting, Khadka said that the draft of the new Supply Agreement with IOC has introduced a provision that allows NOC to procure fuel from third country in case IOC is unable to supply petroleum products to Nepal as per demand.
Meanwhile, Khadka said that commercial fuel trading with China and other countries is only possible through government-level agreement. "If we are to diversify our petroleum trade, the government should hold government-to-government talks with governments of different countries," he said, hoping that the visit of Prime Minister Puspa Kamal Dahal to China next week will expedite the process for Nepal-China commercial fuel trade deal.
However, NOC has included some provisions like reducing marketing charge that IOC has been levying on fuel supplied to Nepal from 2.5 per cent to 2 per cent. It is expected to reduce NOC's cost of import by more than Rs 1 billion every year.
The review meeting of Supply Agreement between IOC and NOC held last week had decided to reduce the marketing charge in the new agreement that comes into effect from April 1.
The new agreement will be in force until March 31, 2022.
The new agreement also allows Nepal to import fuel from third countries if IOC is unable to ensure regular supply of petroleum products to Nepal.
Likewise, IOC has also agreed to waive off interest levied on NOC for delay in payment. NOC makes payment to IOC twice a month, on 8th and 23rd day of every month. IOC had been slapping penalty for every day in case of delay in payments.

Consumer body flays decision to hike cooking gas price

Consumer rights activists today urged the government to roll back its recent decision to hike price of cooking gas. Submitting a memorandum ot the Prime Minister Puspa Kamal Dahal at his office, National Consumers Forum (NCF) has also condemned the decision to hike price of liquefied petroleum gas (LPG), popularly known as cooking gas.
The forum has demanded that the government rollback the decision immediately. "The decision has hit consumers hard as the price of cooking gas has been increased twice in the past one and half months," it said in a press note. The government fuel monopoly has jacked up the price of cooking gas by Rs 25 per cylinder on Friday citing price hike in the international market.
The country is observing the World Consumer Rights Day on February 15. And the government and various organisations working for consumer rights have announced series of programmes to mark the World Consumer Rights Day.
But on one hand, the government talks about safeguarding the rights of the consumers and on the other hand it increases price of essentials like cooking gas when the World Consumer Rights Day is just around the corner, the consumer right activists blamed.
According to president of National Consumer Forum (NCF) Prem Lal Maharjan, the government should review its decision before announcing any awareness programmes targeting the World Consumer Rights Day.
He also threatened the government that consumer rights activists would boycott all government events to mark the World Consumer Rights Day, if the Supplies Ministry does not bring down the price of cooking gas as soon as possible.
As NOC has been logging profit in recent months, the decision to increase price cannot be justified,” the memorandum to the premier reads.
The forum has also argued that the intention behind increasing price of cooking gas is to fleece consumers.
Cooking gas now costs Rs 1,375 per cylinder.
The NOC had claimed that the price of cooking gas was increased because its sole supplier – Indian Oil Corporation (IOC) – increased price of the cooking gas. "NOC will suffer loss of Rs 291.50 per cylinder even after the fresh adjustment in price," according ot the corporation.
According to the new rates forwarded by IOC, the corporation would have suffered loss of Rs 313.51 per cylinder, had it not hiked the price.
NOC, however, has kept the price of diesel, petrol and kerosene unchanged. Earlier in February also the NOC had increased the price of cooking gas by Rs 25 per cylinder, citing price hike in the international market. The NOC is logging profits in sale of petrol, kerosene and aviation turbine fuel, while it is suffering loss in diesel and cooking gas, it claimed.
The corporation however has been selling petrol at a profit of Rs 1.23 per liter in March, while it has been facing loss of Rs 4.07 per liter in diesel. NOC has also claimed that it will suffer a loss of Rs 414.4 million in March.

Cooking gas price up by Rs 25 per cylinder

Claiming that it is in loss on cooking gas, Nepal Oil Corporation (NOC) has increased the price of Liquefied Petroleum Gas (LPG) by Rs 25 per cylinder.
LPG – popularly known gas cooking gas – will cost Rs 1,375 per cylinder from tonight, according to NOC spokesperson Sita Ram Pokharel.
This is the second time the NOC has raised the LPG price in the last one-and-a-half months. NOC had increased LPG price by Rs 25 per cylinder on February 2 also.
In the new price list, the sole supplier of the petroleum products to NOC – Indian Oil Corporation (IOC) – has increased LPG price by Rs 122 per cylinder. "With this adjustment in price, NOC has to bear a loss of Rs 333 on the sale of each cooking gas cylinder,” he added. "But the price increment, NOC will still suffer loss of Rs 291.50 per cylinder in a month."
The fresh upward adjustment in price has been made due to price movement in the international market, he said, adding that the corporation had to increase price of LPG after IOC increased price of the popular cooking fuel. "With the revised price, the loss has come down to Rs 288.51 per cylinder."
NOC, however, has kept the price of diesel, petrol and kerosene unchanged. The state oil monopoly is logging profits in sale of petrol, kerosene and aviation turbine fuel, while it is suffering loss in diesel and cooking gas. The corporation is making profits on other petroleum products – Rs 1.23 per litre on petrol, Rs 13.05 per litre on kerosene and Rs 13.01 per litre on aviation turbine fuel – though it claims to be incurring a loss of Rs 4.07 per litre on diesel.

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.