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.

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.

अन्तर्राष्ट्रिय बजारमा भाउ घट्दा नेपालमा घटाउँदैन निगम

एक महिनामा प्रतिलिटर पेट्रोलमा ३२.५६ रुपैया घटेर आएको छ

एक महिनाको अवधीमा इन्डियन आयल कर्पोरेसन (आइओसी)बाट प्रतिलिटर पेट्रोलमा ३२ रुपैया ५६ पैसा घटेर आएको छ । आइओसीबाट भाउ बढेर आउँदा स्वचालित मुल्य प्रणालीका नाममा तत्काल भाउ बढाउने नेपाल आयल निगम भने पछिल्लो एक महिनामा लगातार दुइ पल्ट भाउ घटेर आउँदा पनि स्वचालित मुल्य प्रणालीको उच्चारण गर्न पनि चाहँदैन ।

आइओसीले नेपाललाई बिक्री गर्ने पेट्रोलियम पदार्थको मूल्य घटाएर पठाएको यो दोस्रो पटक हो । प्रत्येक अंगे्रजी महिनाको पहिलो तथा पन्ध्रौ तारिखमा आइओसीले इन्धनको नयाँ मुल्य पठाउँछ । अन्तर्राष्ट्रिय बजारमा कच्चा तेलको मूल्य घट्न थालेपछि यसपटक १६ जुलाई तथा १ अगस्ट गरेर दुई पटक आइओसीले नेपालका लागि पनि मूल्य घटाएर पठाएको छ । 

आईओसीले १ अगस्टमा पठाएको नयाँ मूल्यसूचीअनुसार प्रतिलिटर पेट्रोलमा १६.८० रुपैयाँ तथा डिजेल र मट्टीतेलमा १२.४५ रुपैयाँले घटाएको छ भने यसअघि गत १५ जुलाईमा पनि आईओसीले पठाएको मूल्यसूचीमा प्रतिलिटर पेट्रोलमा १५.७६ रुपैयाँ र डिजेलमा १६.५६ रुपैयाँले मूल्य घटाएको थियो ।

तर, भारतबाट मूल्य घटेर आए पनि निगमले भने अझै पेट्रोलियम पदार्थको मूल्य समायोजन गरेको छैन । यसअघि मूल्य घटेर आउँदा पनि निगमले अझै प्रतिलिटर पेट्रोलमा १४.१९ रुपैयाँ तथा डिजेल र मट्टीतेलमा २१.९२  रुपैयाँ घाटा नै रहेको जनाउँदै मूल्य समायोजन गरेको थिएन । तर १ अगस्टको मुल्यका अनुसार निगमलाई प्रतिलिटर पेट्रोलमा २ रुपैयाभन्दा बढि नाफा हुन्छ । डिजेलमा भने अझै घाटा रहेको निगमको दाबी छ ।

अन्तर्राष्ट्रिय बजारमा प्रति ब्यारेल (१५९ लिटर) कच्चा तेल गत वर्षको १२३ अमेरिकी डलरबाट घटेर हाल १०३ डलरमा झरेको छ । जसका कारण आइओसीले पनि निगमलाई पछिल्लो एक महिनामा र्दुइ पटक भाउ घटाएर पठाएको हो । तर, निगमले आफनो घाटा बाँकी नै रहेकाले भाउ कम गर्न सक्ने अवस्था नरहेको जनाएको छ । निगमका अनुसार हाल आइओसीलाई १४ अर्ब रूपैयाँ अझै तिर्न बाँकी छ । साथै, मूल्य घटेर आउँदा पनि १५ दिनमा ७५ करोड घाटा छ भने मासिक १.५० अर्ब घाटामा हुने निगमले जनाएको छ । भारतले पठाएको नयाँ मूल्य अनुसार निगमलाई पेट्रोलमा नाफा हुने भएकाले निगमको घाटाम सुधार हुने देखिन्छ ।

आयल निगमले आइओसीबाट सबै किसिमका प्रशोधित पेट्रोलियम पदार्थ किन्दै आएको छ । यसरी पेट्रोलियम किनेबापत आइओसीले हरेक पन्ध्र–पन्ध्र दिनमा आयल निगमलाई मूल्य पठाउने गर्छ। सोही मूल्यका आधारमा निगमले उपभोक्ता मूल्य तोक्छ । आइओसीले अन्तर्राष्ट्रिय बजारबाट किन्ने कच्चा तेलको लागत मूल्यमा आफ्नो प्रशोधन शुल्क लगायत खन्य खर्चहरू जोडेर नेपालको निम्ति बिक्री मूल्य तय गर्छ ।

निगमले उपभोक्तालाई हाल पेट्रोल १८१ मा तथा डिजेल र मटितेल १७२ बिक्री गर्दै आएको छ भने हवाई इन्धन (आन्तरिक) १ सय ९० मा बिक्री गर्दै आएको छ । हवाई इन्धन (बाह्य) १.६४५ अमेरिकी डलरमा बिक्री गर्दै आएको छ । साथै खाना पकाउने एलपी ग्यास १८ सयमा बिक्री गर्दै आएको छ ।

इन्धनको मुल्य बढेका कारण यातायातदेखि बजार भाउसम्म सबै बढेको छ । नेपाल राष्ट्र बैंकको सर्वेक्षणअनुसार हाल पनि बजारमा १४ प्रतिशतको मुल्यबृद्धि छ भने आगामी तीन महिना अर्थात् दशैं तिहारमा पनि मुल्यबृद्धि १४.२ प्रतिशत नै हुने अनुमान गरिएको छ । 

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.

Passenger transport, cargo fare up

With a hike in fuel prices, public transportation and cargo fare have also gone up with immediate effect, according to the auto-fare mechanism.

The state oil-monopoly yesterday night jacked up the price of petrol by Rs 21 to Rs 199 and diesel by Rs 26 to Rs 192 per litre, forcing the air and land transportation fare to go up.

The Department of Transport Management (DoTM) today approved the new transport fare in  passenger carriers’ up by 5.30 per cent, whereas for the cargo carriers playing on Terai and hills routes, the fare has been hiked by 7.7 per cent and 6.94 per cent, respectively.

According to the auto-pricing mechanism, the government allows transport entrepreneurs to adjust fares upward or downward when fuel prices fluctuate by 5 per cent.

Thus, along with the rise in the prices of petroleum products, fares of public transport go up, accordingly, or vice versa.

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.

Lawmakers urge to bring Petroleum Act

Lawmakers asked the government to bring the Petroleum Act immediately to also address the current petroleum price hike.

Participating in the discussion of a special proposal registered by the opposition chief whip Bishal Bhattarai, general secretary of the Nepali Congress (NC) and lawmaker Gagan Thapa requested the government to bring the Petroleum Act immediately in the current session of the House to make the fuel business transparent. Suggesting the government to make a petrol, diesel and LP gas free country within 10 years, he said that the government has reduced price of petrol and diesel by Rs 10 per liter but it is not enough. “People should be given relief by further reducing the petroleum price,” he said, asking the government to reduce the taxes levied on petroleum products.

The government monopoly Nepal Oil Corporation (NOC) imports and distributes the fuel worth billions without the Petroleum Act, which has helped people doubt on the transparency. The government entities consume more than half the imports, and is suspected leakage on supply. The consumer rights activists have been long asking the government to bring the Petroleum Act to monitor and regulate the billion-rupee petroleum business. However, neither the incumbent government nor the past governments have any interest in bringing the Act.

Registering the special proposal at the House of Representatives today, CPN-UML chief whip Bishal Bhattarai, urged the government to reduce the prices of petroleum products. UML lawmakers also demanded a parliamentary probe committee to study the price increment of petroleum products.

UML lawmaker Yagya Raj Sunuwar also said that the public is suffering due to the hike in fuel prices. Suspecting the decision to hike prices of petroleum products of corruption, he asked it to be investigated by the parliamentary committee. He said that prices of petroleum products were hiked twice in a week contrary to the procedure laid down by the government.

Likewise, other lawmakers and members of UML demanded the government to further lower the prices of petroleum products in the domestic market.

The hike in petroleum prices will push the inflation up as fuel is the most important factor in price hike in the market. According to the central bank, the inflation has been recorded at 7.3 per cent in the nine months of the current fiscal year. The government – in its fiscal policy for the current fiscal year – and central bank – in its Monetary Policy for the current fiscal year, had targetted to keep the inflation under 6.5 per cent. But both the government and central bank failed to crack the whip on rising inflation also due to rising petroleum prices. The petroleum prices have been increasing in the world due to supply disruption and Russia-Ukraine war that seems to end no time sooner.

Cabinet appoints Thani as new managing director of Nepal Oil Corporation

The cabinet today appointed Umesh Prasad Thani as the managing director of the state oil monopoly.

Three candidates were shortlisted for the crucial post that has remained vacant for the past two months and the cabinet approved Thani as the new MD of Nepal Oil Corporation (NOC).

According to the Ministry of Industry, Commerce and Supplies (MoICS), the selection committee has yesterday recommended Umesh Prasad Thani, Chandika Prasad Bhatta and Jeevan Prakash Sitaula for the post of NOC chief to the cabinet.

In response to the public call two months ago, some 17 individuals had applied for the vacant position.

Thani, who is considered close to the Nepali Congress, has worked as a member of the board of directors of Nepal Electricity Authority (NEA) earlier.

Sitaula is a former director general of the Department of Industry, whereas Bhatta, who led NOC before Gopal Bahadur Khadka, is the chief of the Special Economic Zone (SEZ) Authority at present.

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.

NOC saves Rs 3 billion due to pipeline but consumers pay all time high

Nepal Oil Corporation (NOC) saved fuel transport costs of Rs 3 billion in last two years after the construction of 69-kilometer cross-border petroleum pipeline between Nepal and India, but the consumers have been paying all time high price.

The first petroleum pipeline that connects Motihari in India to Amlekhgunj in Nepal has been operational since September 11, 2019. "It can supply petroleum products at the rate of 294 kiloliters per hour," according to the government oil monopoly.

The pipeline is being used to transport diesel from India, the NOC informed, adding that it has been importing an average of 3,500 kl diesel daily, almost half of its capacity to transport 6.500 kl daily. "The NOC imported 1.61 billion liters of diesel through the pipeline in the fiscal years 2019-20 and 2020-21."

In almost two months of the current fiscal year, the NOC has imported a total of 124.41 million liters of diesel through the pipeline.

Likewise, the NOC also informed that it costs an average of Rs 45,000 to transport fuel from the Barauni depot of India to Amlekhgunj of Nepal. "The pipeline has helped cut the costs of fuel tankers apart from reducing technical losses," the NOC claimed. But the consumers have been got no any respite as they have been forced to pay Rs 130 per litre petrol and Rs 113 per litre diesel.

The first cross-border petroleum pipeline in South Asia was built at a total cost of Rs 5.18 billion.

Petro-pipeline extention to Chitwan to cost Rs 4 billion

 Some 62 km long petroleum pipeline extension from Amlekhgunj to Chitwan is going to cost Rs 4 billion, though, the entire project, including building associated infrastructure, is estimated to be around Rs 14 billion, according to a feasibility study conducted by the Nepal Oil Corporation (NOC).

The government is planning to stretch the pipeline to Chitwan in the first phase, and to Kathmandu eventually. Currently, the 69-km cross-border pipeline from Motihari in India to Amlekhgunj is operational since last one-and-a-half year. 

A joint technical study team of NOC and its sole petroleum products supplier Indian Oil Corporation (IOC) has prepared the feasibility study that has suggested the extension of the pipeline from Amlekhgunj to Lothar in Chitwan. The team submitted the feasibility study report to the Ministry of Industry, Commerce and Supplies. 

The NOC has also started discussions regarding the investment and construction modality with the ministry as it doesnot have the technical expertise to build the project on their own. 

The ministry, however, said a decision regarding the construction and financial modality will be finalised next week by the cabinet.

According to the ministry, the same company that build the Motihari-Amlekhgunj pipeline could be awarded the project or it can be awarded to any other experienced company through an open bidding process.

The NOC, along with the pipeline, also plan to construct a modern depot in Lothar for oil storage. The depot in Lothar will have a capacity of more than 100,000 kilolitres. Currently, the NOC's total storage capacity across the country amounts to 71,000 kilolitres, enough to meet its requirement for less than a week.

The construction of the Motihari-Amlekhgunj pipeline has allowed NOC to save Rs 2 billion in freight charges so far. The NOC is able to save freight charges as it will not need to seek the services of tanker, after the construction of pipeline.

The pipeline currently brings diesel only, but the NOC plans to bring petrol too through the pipeline this year. The pipeline also helps in reducing petroleum leakage, theft and adulteration. According to the NOC, it spends around Rs 6 billion on transporting petroleum products through oil tankers annually.

Following the obstruction in petroleum supply during the four-and-a-half-months-long Tarai unrest in 2015, the government thought of expanding fuel storage capacity to meet domestic demand for at least three months.

Likewise, another team from Indian Oil Corporation (IOC), which built the Motihari-Amlekhgunj pipeline as a gift to Nepal, also conducted a survey for pipeline connecting Nepal Oil Corporation's depot at Charali in Jhapa with Siliguri, in West Bengal of India. The initial survey revealed that some 35 km of pipeline will be laid in Indian territory and 15 km on the Nepal side of the border.

Nepal imports petroleum products worth more than Rs 200 billion annually, except last fiscal year, when the entire country was under lockdown reducing the vehicular movement. However, Nepal's petroleum consumption has almost doubled in last five years, according to a report of the Central Bureau of Statistics. Nepal's total export receipt is not enough to pay for a single commodity petroleum product's import bill. 

Due to ever growing requirement, the government has also planned to extend the pipeline to Kathmandu.

NOC’s profit increases by Rs 4 billion despite the pandemic

 Welcome to the journey towards socialism as the state-owned entity earns hefty profit – where consumers get nothing – and private enterprises are directed to share their profit and spend in corporate social responsibility (CSR).

The state-owned Nepal Oil Corporation (NOC) has earned Rs 12.87 billion profits in the last fiscal year 2019-20 – compared to Rs 8.75 billion profit in the fiscal year 2018-19 – though consumers get nothing from the hefty profit of the state-oil monopoly.

The corporation last fiscal year paid Rs 66.88 billion as revenue – by trading fuel – to the government. It has last fiscal year imported 2.5 million kiloliters (kl) of fuel worth Rs 205 billion, which is 11 per cent less than a fiscal year ago. “Of the total collected taxes under different headings, the NOC has collected Rs 4.99 billion from consumers as road maintenance charge in a period of five years. Likewise, Rs 2.94 billion has been collected as pollution tax and Rs 13.98 billion as infrastructure development tax, which all went to the government coffer.  

The state-oil monopoly attributed increase in profit to savings in transportation cost by importing fuel from cross country petroleum pipeline – the first one in the South Asia – and also earnings from the interest on the previous year's profit.

Most of the trade and businesses were hit by the corona pandemic as the country came to a standstill for four months, and subsequent prohibitory orders then after for almost one month to follow with restriction on vehicular movements till last month, the NOC pocketed decent profit.

The corporation – technically bankrupt couple of years ago – has started making profit since the fiscal year 2017-18 due to the fall in fuel prices in the international market and also the implementation of automatic pricing system. The corporation claimed that it saved Rs 0.47 billion by pumping diesel through the pipeline, whereas it has earned Rs 1.77 billion from interest in last year's profit from the banks alone.

Encouraged by the first cross border pipeline, and its benefits, the corporation is also planning a second cross border pipeline project. The corporation is also planning to increase in storage capacity in all the seven provinces from the profit. Likewise, the corporation has prepared a balance sheet according to the Nepal Financial Reporting Standards (NFRS) for the first time, the NOC claimed, adding that the corporation has also increased its paid up capital from Rs 290 million to Rs 11 billion in the fiscal year 2018-19.

AOAN demands reduction of aviation fuel price

The Airlines Operators Association of Nepal (AOAN) has demanded the government to reduce the price of aviation fuel for the domestic air service.
As the government is preparing to resume domestic flights that have been suspended since March 22 due to fear of Covid-19 transmission while traveling, the operators have today asked – issuing a press note – the government to revise the price of aviation fuel downwards.
“As the government has asked to operate the flights maintaining the physical distance, the flights will have only half passenger,” the association said, adding that flying with half the seat-capacity of the aircraft will not be possible. The association has also suggested the Ministry for Culture, Tourism and Civil Aviation to lobby for letting aircraft operate as per their capacity, make arrangements so that air crew do not have to be quarantined in the destination, let taxi and other public vehicles along with hotels and restaurants operate.
Likewise, the association has suggested the government to start operation of domestic flights – in phases – starting from July 1. “In the first phase, the flights to the mountainous districts should be operated,” the association recommended, whereas flights to the Terai region should be started in the second phase. “The dates will be, though, fixed by the Civil Aviation Authority of Nepal (CAAN), the domestic carriers are ready to start operation, provided, the government reduce aviation fuel price.”
Nepal Oil Corporation (NOC) has priced aviation fuel – popularly known as aviation turbine fuel (ATF) – at Rs 65 per liter, whereas the price of fossil fuel has decreased in recent months. The state oil monopoly has not revised the fuel prices since last couple of months as the government has imposed lock down to contain the spread of coronavirus (covid-19). The NOC fixes price according to the price reference set by the Indian Oil Corporation (IOC) that send the price list every fortnight.
The association has also suggested the government to sell aviation fuel with only Rs 10 profit per liter for NOC to make the airline service accessible and beneficial. “If the aviation fuel’s price is not revised downwards, the operators will not be able to operate air service,” the association clarified.
Though, the government has – in the budget for fiscal year 2020-21 – announced the exemption of infrastructure development charge on aviation fuel and removal of customs duty, the price of aviation fuel still is higher based on the revised price list sent by the IOC.

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 fuel prices

The Nepal Oil Corporation (NOC) has increased the price of petrol, diesel and kerosene by Rs 2 effective from Wednesday midnight.
“With this increment, petrol is priced at Rs 111 per litre while diesel and kerosene will cost Rs 100 in Kathmandu,” confirmed NOC spokesperson Birendra Goit. The NOC has made an adjustment based on revised rates forwarded by the Indian Oil Corporation (IOC) – the sole supplier of the fuel to the NOC – today.
However, the price of cooking gas and aviation fuel remained unchanged, he said, adding that the price of petroleum products in places close to Nepal-India border areas will be slightly lower compared to the prices in Kathmandu valley.
Earlier, on December 17, the NOC had raised the price of diesel and kerosene by 1 rupee per liter each, while keeping the petrol price unchanged. But on December 2, the prices of petrol, diesel and kerosene were hiked by Rs 2 per liter each.
After lowering the price by Rs 2 per liter on September 10 – after the formal launch of the Motihari-Amlekhgunj, India-Nepal cross border petroleum pipeline – the NOC has already raised the price of petrol by Rs 4 per litre.

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.

Fossil fuel still accounts for one fifth of total import bill

Despite smooth electricity supply, country’s dependency on fossil fuel has not decreased. “The share of import bills of petroleum products still accounts for 20 per cent of the total import bill worth Rs 207.41 billion,” according to the central bank.
According to Current Macroeconomic Situation of three months, Nepal paid Rs 41.36 billion – during mid July-mid October of the current fiscal year – for petroleum import, Rs 8.22 billion less, from Rs 49.58 billion in the same period of the last fiscal year 2018-19.
But the import bill of petroleum products drop is not due to less consumption rather due to falling price in the international market that determines the price in the domestic market. Nepal spent 16.6 per cent less in import of petroleum products – in the first three months of the current fiscal year 2019-20 compared to the same period last fiscal year – though the import value has increased by 7 per cent.
Though, the import bill – in monetary value – has dropped, the consumption volume has gone up, according to the data of Nepal Oil Corporation (NOC) that revealed that the import volume of fuel including petrol, diesel, kerosene, air turbine fuel and cooking gas increased to 789,144 kiloliters (kl) from 736,105 kl in the same period of the last fiscal year.
The import value is down also due to the variation of the exchange rate of the Nepali currency against the US dollar. The price of the petroleum products depends on the price in the international market.
According to the NOC, price of crude oil in the international market had swelled to $86 per barrel in October from $65 per barrel last July. However, the petroleum prices in the same period this year dropped to around $67 per barrel.
Though, the monetary value of import is less, the volume – especially of diesel – has not gone down. Demand for diesel is rising in the recent days due to construction-related works in hydropower projects unlike the demand from industrial sectors earlier, according to state oil monopoly. “In the first quarter, import of petrol increased to 183,026 kl from 160,846 kl, diesel increased to 412,563 kl from 393,601 kl while import of cooking gas also surged to 127,628 tonnes from 116,546 tonnes in the same period of the last fiscal year,” the NOC data revealed.