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 slashes price of petrol and diesel by Rs 3 per litre

Nepal Oil Corporation (NOC) has finally decreased the prices of petroleum products, after a pressure from the public.

According to the state oil monopoly, the price of petrol, diesel and kerosene has been reduced by Rs 3 per liter with effect from today midnight.

With the reduction, per liter of petrol will cost Rs 178 and per liter of diesel and kerosene will cost Rs 175. Earlier, the price of petrol was Rs 181 and diesel and kerosene was Rs 178.

The Indian Oil Corporation (IOC) has sent a new price list to NOC today after reducing the price of fuel. In its revised price list sent yesterday, the IOC has reduced the prices of petrol by Rs 6.90 per liter, diesel by Rs 12.31 per liter and aviation fuel by Rs 10.61 per liter. According to the revised price, the NOC earns profits of Rs 17 per liter and Rs 10 per liter, in petrol and diesel, respectively, a press note of the NOC reads, projecting that the NOC will earn a profit of Rs 2 billion in the next one month. NOC, however, has kept the prices of aviation turbine fuel (ATF) unchanged at Rs 190 per liter for domestic airlines and $1.645 for international carriers. Likewise, the price of liquefied petroleum gas (LPG) – popularly known as cooking gas –remains the same at Rs 1,800 per liter, the press note adds.

According to the an auto-pricing system, the NOC can increase the price of petroleum products, if the price in international market goes up, and vice versa. But the NOC – citing its earlier loss – has not been reducing the price of petroleum products, despite price decrease in the international market.

This time, the state oil monopoly has been forced to reduce the price due to public pressure. It has reduced the prices of petroleum products today after five months, though the fuel price in the international market has declined by more than 28 per cent.

Last time the NOC had revised the fuel prices was on July 4, when the price of petrol was increased to Rs 181 per liter, and diesel and kerosene was increased to Rs 172 per liter. Since then, the price of crude dropped to $80.86 per barrel from around $112 per barrel in the international market. 

But the NOC has been repeatedly claiming that it has been adopting the auto-pricing system since September, 2014. Breaching its own policy, the NOC has not been decreasing the price of petroleum products lately. It claims that it still owns Rs 19 billion to its supplier IOC. Despite selling in profits, how the NOC is in red is beyond the imagination that led to suspicion.

The NOC has also set up a price stabilisation fund to adjust the price, if it goes down. But the NOC is blamed for misusing the fund too. Consumer rights activists blame the NOC for passing the price burden (loss) to consumers as it failed to manage the public entity.

The government gives no ear to the rising petroleum prices, as it gets hefty taxes from the petroleum business that has not been regulated through an Act yet despite repeated pressure from the public. The government entity – NOC – is doing billions worth petroleum business without any Act, which is why the petroleum business is under scrutiny.

Airlines jack up airfares due to fuel surcharge hike

Airline companies hiked the airfare by up to Rs 1,020 per travel citing recent increase in prices of petroleum products.

The Airlines Operators Association of Nepal (AOAN), confirming the increase in fuel surcharge, said that the one-way ticket of Biratnagar-Nepalgunj has been expensive by over Rs 1,000. as the airfare has increased from Rs 8,915 to Rs 9,935.

The state oil monopoly has increased the price of aviation fuel (domestic) by Rs 19 per liter and the aviation turbine (ATF) fuel for international by $100 per kiloliter, effective from Sunday midnight. With the revised prices, these aviation fuels now cost Rs 185 per liter for domestic and $1,645 per kl for international, respectively.

According to the rule, Rs 5 increase or decrease in ATF should adjust the fuel surcharge accordingly, which will impact the airfare directly.

So, the rate of mountain flight from Kathmandu now costs Rs 6,350 per flight, up from Rs 5,695, according to the AOAN. “Likewise, the airfare for Pokhara-Bhadrapur route has increased from Rs 6,720 to Rs 7,490 per travel.”

After Nepal Oil Corporation (NOC) raised the fuel prices, the land route transporters have also increased the transport fares of inter-provincial passenger and freight transport by up to 7.7 per cent.

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.

Airfares get dearer

 Airlines operators jacked up the airfares by up to Rs 445 due to recent increase in fuel prices.

Nepal Oil Corporation (NOC) has hiked the price of air turbine fuel (ATF) for domestic flights by Rs 10 per liter forcing the airlines operators to jack up the surcharge in airfares.

Since the fuel prices have been increasing regularly every fortnight, this is the third time the airline operators have revised their surcharge charges upwards in the past two-and-a-half months.

According to the Airlines Operators Association Nepal (AOAN), Rs 5 change in ATF will force them revise the fuel surcharge.

On the basis of the new airfare, the one-way trip of Kathmandu-Dhangadhi will now cost Rs 5,125, an increase of Rs 445 as fuel surcharge, the AOAN said, adding that the airfares of Kathmandu-Bharatpur flights will be Rs 1,240, an increase of Rs 105.

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.

LPG price comes down by Rs 25 per cylinder

Nepal Oil Corporation (NOC) has adjusted the price of petroleum products effective from today.
The state petrol monopoly has slashed the price of liquefied petroleum gas (LPG) by Rs 25 per cylinder, bringing the price down to Rs 1,375 per cylinder, whereas it has increased the price of petrol by Re 1, and diesel and kerosene by 50 paisa per liter, respectively.
According to the spokesperson of the NOC Birendra Goit, petrol, diesel and kerosene will now cost Rs 109, Rs 97 and Rs 97 per liter, respectively. “The new prices came into effect from today itself,” he said, adding that the price has been revised according to the automated pricing system. “The NOC receives price of list of products from Indian Oil Corporation (IOC) every fortnight, and revises the price in the domestic market too.”
The IOC sends price rate on 1st and 16th of every Gregorian month.
The NOC has kept the price of aviation turbine fuel (ATF) unchanged, Goit added.

Domestic airfare comes down

Flying inside the country will be a bit cheaper from Sunday as the domestic carriers have slashed the fuel surcharge following a drop in the price of aviation fuel. The domestic airfare has been revised downwards as the fuel surcharge on both trunk and short take-off and landing (STOL) routes has come down.
The new tariff will be implemented from Sunday.
"The fuel surcharge has been decreased by Rs 90 to Rs 440 on trunk routes and Rs 40 to Rs 340 on STOL routes," according to Airlines Operators Association of Nepal (AOAN).
According to Civil Aviation Authority of Nepal (CAAN), the privately-owned domestic airliners can review fuel surcharge, if fuel price increases or decreases by at least Rs 4 per liter. The revised price fuel surcharge, however, should come into effect after 72 hours. The Nepal Oil Corporation (NOC) had reduced ATF price by Rs 10 per litre to Rs 94.50 on Thursday, on its anniversary day.
The surcharge reduction applies to the normal fare which is high but the airliners have been also selling tickets at cheaper rates at present too. According to spokesperson for AOAN Ghanashyam Acharya, on the basis of revised fuel surcharge, tickets for mountain flights will now cost Rs 11,300 from Kathmandu. "Similarly, flights to Pokhara, Bharatpur, Biratnagar, Janakpur, and Simara from Kathmandu will costs Rs 5,050, Rs 3,650, Rs 7,550, Rs 4,300, and Rs 3,120 respectively."
Likewise, airfares to Bhairahawa, Dhangadhi, Nepalgunj, Bhadrapur and Tumlingtar from Kathmandu will be Rs 6,200, Rs 12,650, Rs 10,000, Rs 9,100, and Rs 6,000 respectively.
Airlines operators had increased airfare last August, when the NOC had increased ATF price. Then the domestic carriers raised the fuel surcharge from Rs 40 to Rs 200 when NOC had increased the price of aviation fuel by Rs 4.50 per litre to Rs 104.50 per litre.
According to the Tribhuwan International Airport (TIA), Nepali skies saw 246 domestic flights daily on average.

Aviation fuel for domestic airlines reduced by Rs 10

The state fuel monopoly has slashed the price of aviation turbine fuel (ATF) for the domestic airlines by Rs.10 per liter.
Nepal Oil Corporation (NOC) new price – with the new adjustment – will be effective from tonight. "With the revised price, now the aviation fuel for the domestic airlines costs Rs 94.50 per liter," NOC deputy executive director Sushil Bhattarai said.
Likewise, minister for Industry, Commerce and Supplies Matrika Yadav – speaking at the 49th annual day of the NOC – today also claimed that the revised price will make the people from rural areas comfortable with the airfare.
With the fall in ATF price for the domestic airliners, the domestic airfare is also going to come down.
The state fuel monopoly had been selling the aviation fuel at Rs 104. 50 per litre.
Earlier on January 2, the NOC had slashed the prices of petrol, diesel and kerosene by Rs 2 as the price of the fuel in the international market has come down.

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. 

Airliners reduce fare

Domestic airlines are marginally reducing the airfare to different destinations effective from tomorrow.
The Airlines Operators Association of Nepal (AOAN) meeting today decided to slash fuel surcharge rate following the recent reduction in the price of Aviation Turbine Fuel (ATF). The Nepal Oil Corporation (NOC) had from Monday reduced the price of ATF by Rs 4 per litre to Rs 82 per litre for domestic airline companies.
"Along with reduction in fuel surcharge, domestic airlines will reduce airfares to different destinations from tomorrow," said AOAN spokesperson Ghanashyam Acharya. "The price will come down from Rs 40 to Rs 181 depending on distance."
Though, the AOAN revises fuel surcharge when price of ATF fluctuates by at least Rs 4 per litre, the new airfare can vary depending on the respective airline companies.
According to AOAN, the new airfare to Dhangadi – the furthest destination from Kathmandu – will come down to around Rs 12,019 – including a Rs 3,620 fuel surcharge and a Rs 200 airport tax – from Rs 12,200 from tomorrow with the implementation of new fuel surcharge rate. Likewise, air travel to Simara – the shortest destination from Kathmandu that takes 15 minutes – will be lowered to around Rs 3,005 from Rs 3,045. "The fuel surcharge has been slashed by Rs 40 to Rs 735, according to AOAN.
The mountain flight is also expected to cost Rs 10,862 from tomorrow as against the current rate of Rs 11,000.
The fuel surcharges for Kathmandu-Nepalgunj and Kathmandu-Tumlingtar routes have been reduced by Rs 135 and Rs 77; respectively. Likewise, fuel surcharges for Kathmandu-Bharatpur and Kathmandu-Pokhara routes have been slashed by Rs 47 and Rs 66.
The NOC had been selling aviation fuel at rates much higher than market prices. Airlines have been passing the burden of fuel price on to travellers in the form of fuel surcharge, taking airfares beyond the reach of people.
Airlines currently have over 90 per cent occupancy rate due to poor highway road conditions, particularly the Mugling-Narayangadh highway section.
The people have been resorting to air transport service to travel inside the country. After witnessing a constant fall in passenger numbers in the last four years, the domestic aviation sector rebounded strongly in 2016, recording an all-time high air traveller movement.
According to Tribhuvan International Airport (TIA), the domestic air passenger movement jumped by 28.85 per cent to 1.75 million, as travellers chose to fly rather than drive over ‘bone-jarring’ national highways.
According to deputy at the Air Transport Division of CAAN Subhash Jha, lower fuel surcharge will provide some relief to travelers.
Domestic carriers received 393,548 more flyers last year.  The figure includes 27,893 passengers flown by nine domestic helicopter companies. The passenger movement was on a constant decline since 2012, marking a departure from the robust growth rates seen since 2008 when airlines were flying high due to competitive airfares, constant protests and road blockades, forcing travellers to take it to the air. At that time, rise in NGO/INGO staff movement during the peace process and a real estate boom also helped airlines to do a brisk business.
Airlines saw a heady growth of 13 per cent in passenger movement in 2008. The growth rate jumped to 33 per cent in 2009, as fares were cut amid stiff competition. Although passenger movement increased 12.83 per cent in 2010, the growth rate started dropping in 2011 and recorded negative growth from 2012 to 2015.
The trend reversed in 2016. Nepali skies saw 73,876 flights during that year, up by 12.16 per cent than in 2015.

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.

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.

NOC calls bids from international fuel suppliers

After India refused to send the petroleum products to Nepal – since the last two weeks – Nepal Oil Corporation (NOC) has called global tender to supply fuel to Nepal.
A board meeting of NOC today evening decided to issue a public notice tomorrow calling for global bids from fuel suppliers for 15 days, a source at the state oil monopoly said requesting anonymity.
It is the first time in history that NOC has called global bids from international fuel companies for petroleum supply.
Despite four decades of commercial association and agreement with the Indian Oil Corporation (IOC) – the sole petroleum supplier to the NOC – the latter has failed to supply fuel to Nepal citing security reasons – due to protests in the Tarai-Madhesh – since the past two weeks. While responding to the NOC official's request, the IOC officials said that they have been told not to supply petroleum products to Nepal, though India claims to have not been imposed blockade on Nepal.
IOC has slashed the fuel supply to Nepal by over 90 per cent compared to normal times though NOC has not violated the contract with IOC. NOC and IOC had renewed agreement in 2012. It is valid till 2017. According to the commercial agreement between NOC and IOC, the latter will supply as much as petroleum products NOC needs.
Following the unofficial India-imposed economic blockade, the IOC has refused to supply fuel – including cooking gas – to Nepali tankers and bullets reached in the Indian depots.
Likewise, the Indian customs officials have also been preventing loaded fuel tankers from entering Nepal.
Reeling under acute shortage of petroleum products – after IOC's failure in maintaining smooth supply – NOC has been left with no option other than to call global bids. After the IOC's reluctance to supply fuel that has not only paralysed normal life but has also crippled the economy, the NOC has no option to call global tender, the official said, adding that the NOC is expected to select the fuel supplier to Nepal through a competitive bidding process."
An unofficial blockade by India restricting the flow of oil tankers and trucks into the country has also caused disruptions in transportation and made schools to shut down. Hospitals are also running low on medicine. There could soon be humanitarian crisis, if India does not lift its embargo.
The cabinet had this week directed, the Ministry of Commerce and Supplies, to explore the alternative, in case the IOC does not cooperate. The cabinet had asked the ministry to ease the supply of petroleum products – including aviation fuel, petrol, diesel, kerosene and LPG (cooking gas) for 15 days – as a temporary measure. However, it is high time, Nepal should think of long-term option as the political arm twisting of India through IOC has made the Nepalis suffer a lot. NOC took long time to come to conclusion and look for alternative also due to non-cooperation of the ministry that has never thought of easing supply during the crisis in the past too.
The state-owned oil monopoly has asked the interested bidders to submit their Expression of Interest (EoI) within three days. "NOC wants 200 kilolitre of diesel, 100 kilolitre of petrol, 200 kilolitre of ATF, 200 kilolitre of kerosene and 100 metric tonnes of LPG immediately for 15 days either through land or air route," the bid read.
Earlier this week, NOC had even sent a letter to IOC requesting immediate resumption of regular supply. But the IOC did not heed NOC's request forcing the latter to call for gloal tender to maintain fuel supply.

Cooking gas price to go up by around Rs 400 per cylinder

The cooking gas price is going to increase by Rs 400 per cylinder – to Rs 1,870  from current Rs 1,470 – from January, according to the Nepal Oil Corporation (NOC).

After jacking up the price too, the state oil monopoly will incur a loss of around Rs 1,000 per cylinder, according to the current international market price, it said.

The corporation said that it is incurring Rs 755.38 loss in a cylinder of LPG – popularly known as cooking gas – currently, when it is selling at Rs 1,470, also due to appreciating US dollar in recent months. "The LPG is more consumed in winter season and more import means more loss to the NOC," it added.

"The recent rise in Saudi Arabian Contract Price (CP) – that controls the majority of petroleum market globally – and rise in US dollar hit the corporation," the state oil monopoly said, adding that it has no option than to adjust the cooking gas price upward.

Though, the government had planned to separate cooking gas cylinder – blue for commercial and red for domestic purpose – the NOC has not been able to implement it, which has also made it difficult to adjust the price.

Due to failure in forming much talked auto-price mechanism, Price Stabilisation Fund, increased red-tape in the technically insolvent corporation and mismanagement, the NOC is incurring Rs 1.35 billion per month, as it is incurring Rs 11.09 per litre loss also in diesel, apart from cooking gas, though it is making Rs 5.16 per litre profit in petrol, Rs 6.03 per litre profit in kerosene and Rs 28.42 per litre in duty paid (domestic) and Rs 31.57 per litre in bonded (international) Air Turbine Fuel (ATF).

The government had lent it Rs 12.64 billion and the total outstanding loan of the NOC stands at Rs 33.66 billion. It pays Rs 225.70 million monthly interest for its total outstanding loan.

Enough food, fuel stock will be able to check inflation: Baskota

As the people have feared of price hike of most of the essential food grains and vegetables due to bandh, a high government official today claimed that the general strike could not create shortage of food grains and fuel – that could shoot the inflation high up – as the Kathmandu valley has enough stock.

"The food grain stock will be enough for three weeks and petroleum products for some nine days," said secretary at the Office of the Prime Minister Krishna Hari Baskota, here today at a programme.

The 33-party alliance led by CPN-Maoist has announced general strike for 10 days starting from November 11 till November 20 to foil Constituent Assembly (CA) election that is scheduled on November 19.

Though the core city area has seen enough vehicles on the road, life in the Valley outskirts and out of the Valley has seen less vehicular movements due to fear of bandh callers, who have resorted to vandalism and arson.

Kathmandu Valley consumes around 350 metric tonnes to 400 metric tonnes of food grain daily, he said, adding that the Nepal Food corporation has 16,400 tonnes of food grain. "The food grain stock will be enough to control unnatural price hike."

likewise, Nepal Oil Corporation has 19,155 kilo litre (kl) petroleum products that is enough for nine days, Baskota added. "There will be no shortage of cooking gas and air turbine fuel (ATF) either."

Though the government has repeatedly failed to crack whip on inflation in the normal times too, he claimed that the general strike would not fuel the price, as the government is regularly monitoring the market.

However, after the agreement with the government yesterday, the transport entrepreneurs have started operating their vehicles. The government has yesterday assured the transporters to pay Rs 50,000 compensation immediately, if the vehicles is damaged by the poll-opposers.

Government agrees to provide Rs 2 billion loan to NOC

The cabinet meeting today decided to provide another tranche of loan to the technically bankrupt state oil monopoly.

The government will provide Rs 2 billion to Nepal Oil Corporation (NOC) – in less than two months from the earlier Rs 2 billion – to clear its dues of its sole petroleum products supplier Indian Oil Corporation (IOC), the government's spokesperson said after the cabinet meeting.

Employess Provident Fund (EPF) and Citizen Investment Trust (CIT) will provide Rs 1 billion each to the debt ridden state entity.

The NOC will have a total of Rs 32 million, including Rs 12.64 billion of government, Rs 10 billion of EPF and Rs 6 billion of CIT.
According to the NOC, it is in loss in diesel and cooking gas, though it is making profit in petrol, kerosene, aviation fuel (domestic) and aviation fuel (international). NOC is expected to post a loss of Rs 1.04 billion in November according to the latest price list. And the red tape and mismanagement has not only hurt the state oil monopoly but also the economy as the demand of fuel is also increasing due to regular power outage and the Constituent Assembly (CA) election scheduled for November 19.

The election has forced the NOC to double its stock of petroleum products as the consumption will increase and ensuring smooth fuel supply will be difficult.

The state oil monopoly is planning to stock an additional 14,000 kiloliters (kl) for the election.

NOC has a storage capacity of 71,558 kl – across the country – that can fulfill the demand for less than 15 days.

The state oil monopoly has estimated that around 700 kl of petrol and 1,500 kl of diesel is consumed daily across the country. Kathmandu Valley alone consumes 350 kl petrol and 450 kl diesel everyday.

Airlines postpone protest plans

The airliners have shelved the protest programmes till the festivals.

The protest programmes have been postponed for a month till November 9, according to the Airlines Operators Association of Nepal (AOAN) that had announced its protest – that started from September 29 – against the aviation fuel price hike.
“However, after a month, we will continue the protest programmes against the repeated hikes in the price of aviation fuel,” president of AOAN Rameshwor Thapa, said, adding that the repeated increment of fuel charge is not justified as it pushes the airfare hitting directly passengers.

The fuel alone accounts for 40 per cent of the operating cost of an airline, the AOAN added. “Likewise, weather and runway problems have been adding an additional five per cent burden on the top of operating costs.”

Domestic airline operators have been protesting the recent price hike in aviation fuel by Rs 7 from Rs 130 to Rs 137 per litre – on September 11 by the state oil monopoly. Earlier the Nepal Oil Corporation (NOC) hiked the aviation fuel price by Rs 10 forcing the airline operators to increase the fuel surcharge. 
The rise in aviation fuel prices has directly passed onto travellers in the form of a fuel-surcharge. In the last 18 months, airfares have soared by an additional Rs 2,500 on long-haul routes and a minimum of Rs 1,000 in short-haul ones.
The hike in fuel price will not only hit the passenger but also domestic aviation sector. “The rural populace will get hurt from the frequent rise in aviation fuel price,” the operators said, asking the government to remove cross subsidy and bring bank guarantee for domestic aviation sector.
Domestic passenger movement through the Tribhuvan International Airport (TIA) dropped by 3.60 per cent year-on-year to 772,873 in the first six months of 2013. The operators said that air passenger movement will continue to decline with regular increase in airfare.