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.

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.

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.

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.

Fuel prices drops after cross-border petroleum pipeline comes into operation

Nepal Oil Corporation (NOC) has reduced the price of diesel, petrol and kerosene by Rs 2 per liter effective from today noon.
The state-owned oil monopoly confirmed that after the decision to lower the price of the petroleum products, petrol will cost Rs 107 per liter in Kathmandu valley, while diesel and kerosene will cost for Rs 97 per liter each. “The decision to revise price downward has been taken after formal launch of the India-Nepal cross border petroleum pipeline from Motihari to Amlekhgunj,” the NOC said, adding that the prime ministers of Nepal and India jointly inaugurated the cross border petroleum pipeline today morning.
Jointly inaugurated by Prime Minister KP Sharma Oli from Kathmandu and Indian Prime Minister Narendra Modi from New Delhi through a remote control, the 69-kilometer petroleum pipeline has helped reduce the price of petroleum products as expected, the NOC said, adding that supply of fuel from the pipeline is estimated to save Rs 2 to Rs 5 per liter in transportation cost, apart from the guarantee of smooth supply and efficiency.
The first cross-border petroleum pipeline in South Asia can pump NOC, however, has also attributed the reduction in petroleum prices to downward revision in prices in the international market, savings from the supply of fuel through the newly inaugurated cross-border pipeline and fluctuation in foreign currency exchange.
NOC – issuing a press note today – said that the price has been revised according to its 'automated pricing mechanism' system. Under the mechanism, NOC revises the fuel prices in line with the fluctuation of prices of petroleum products in the international markets, based on the price it receives from its sole supplier Indian Oil Corporation (IOC).

Nepal Oil Corporation hikes petro-prices

Nepal Oil Corporation (NOC) has hiked the price of petrol, diesel and kerosene by Rs 2 per litre each to be effective from Saturday midnight.
With the revision in fuel price, petrol now costs Rs110 per litre and diesel and kerosene each costs Rs 97 per litre.
With the latest revision, the state-oil monopoly is expected to earn a profit of Rs 1.16 billion in 15 days, as the price in the international market is going down.
The price of aviation fuel and LPG – popularly known as cooking gas – has not been changed, according to the NOC, which has claimed that the fuel price was adjusted as per the new price list sent by Indian Oil Corporation (IOC), the sole supplier of the petroleum products for NOC.

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.

Taxi travel to cost more

The Department of Transport Management has recommended taxi fare hike taxi by 15.62 per cent to the Ministry for Physical Infrastructure and Transport.

The current taxi fare is Rs 32 per km and with the implementation of the proposed hike, commuters will have to pay Rs 5 extra for every km they travel.
“The department has proposed Rs 37 per km,” said technical director at the department Sarad Adhikari. “The hike is based on inflation and growing (vehicle) maintenance expenses,” he said, adding that the department has submitted the proposal last week. “The ministry will take a decision soon.”
According to the department, taxi fare hike was proposed based on the recommendation made by a three-member technical team headed by Adhikari.
“We have analysed three major components — inflation, fuel price and wages of taxi drivers — while reviewing the taxi fares,” he added.
The taxi operators too have long been demanding that the government increase the taxi fares.
The department has proposed that the flag down rate should be Rs 14, instead of current Rs 10. Flag down rate is the charge that appears on the digital screen the moment a passenger gets into taxi. Though taxi fare was hiked by 8.19 per cent, taking it to Rs 32 per km, in March 2012, the flag down rate has not been increased since 2008. Last year petrol used to cost Rs 116 per litre, now it has increased to Rs 123 per litre.
Out of 15,000 taxis plying across the country, 80 per cent are in the Kathmandu Valley and Pokhara and rest in other cities of the country.

Petroleum products shortage to continue

It might take a few more days for petroleum supply to ease also due to the state oil monopoly's apathy towards importing more fuel.

"The decrease in the import of petroleum products will also reduce Nepal Oil Corporation's (NOC) losses, which is one of the key reasons the state oil monopoly is reluctant in increasing imports that has created fuel shortage in recent days," according to a source at NOC.

"Currently, NOC has projected a loss of Rs 732.80 million for March and apart from reducing its losses, creating a shortage will also prepare ground for a price hike of petroleum products," he said, adding that besides NOC's hidden agendas, there are some valid reasons too for the short supply.

Oil tankers that ferry petroleum products are not going to Barauni depot to import fuel after a tanker staff was murdered around 15 days back on the way to Barauni depot, and Raxaul depot, which is currently under renovation, is unable to supply according to NOC's demand.

NOC imports from five depots and terminals of IOC in India. Apart from Barauni and Raxaul depots, it imports fuel from Betalpur depot at Mugalsarai Terminal, and Gonda depot and Banthara depot of Allahabad Terminal for different regions.

Likewise, another key reason for dwindling supply is lack of NOC's timely payment to its sole supplier Indian Oil Corporation (IOC). "NOC has to pay Rs two billion to IOC, at present," he said, adding that it could also be the reason behind reduced supply, though IOC had promised not to cut supply a fortnight ago.

Besides supply constraints, NOC has also not increased its storage capacity since long. "Increasing storage capacity according to the rising market demand is key," the source said, adding that the present storage capacity of 71,558 kl is just enough for 15 days, according to projected sales in 2009. But the current demand and projected sales have increased in the last three years.

The country had imported petroleum products worth Rs 30.65 billion in the first six months of fiscal year 2010-11 and in the last two years, it has increased to Rs 49.48 billion, in the same period of the current fiscal year 2012-13, according to the central bank data. The import of petroleum products is projected to cross Rs 100 billion in the current fiscal year.

Despite NOC's repeated promise to expand storage facilities, it has not been able to develop storage facilities to meet the current demand of at least 30 days, he said.

Likewise, NOC has become a technically insolvent agency as it has never been able to manage its income and expenses due to regular political bickering after 1990 and rampant corruption, the source added.

At the current selling price, LPG — popularly known as cooking gas — and diesel contributes more to NOC's losses as it incurs a loss of Rs 513.14 per cylinder of cooking gas and Rs 5.43 per litre of diesel, according to March 1 price list of IOC. "But it has been making a profit on petrol (Rs 2.27 per litre), kerosene (Rs 9.16 per litre) and both Aviation Turbine Fuels — domestic (Rs 20.24 per litre) and international (Rs 24.97 per litre)."

Cabinet agrees 'principally' on Raxual-Amlekagunj oil pipeline construction

The cabinet yesterday ‘principally’ agreed to allow Indian Oil Corporation (IOC) — the sole supplier of petroleum products to Nepal Oil Corporation (NOC) — construct a 40-km petroleum pipeline from Raxaul depot of IOC to the Amlekhgunj depot of NOC.

However, the cabinet has also formed a committee led by vice chair of the National Planning Commission (NPC) Deependra Bahadur Kshetry to study the modality of the pipeline project. "After the committee takes a complete shape with representation from NOC and Ministry of Commerce and Supplies, we will finalise the modality and procedures," said Kshetry. "Earlier, the project was proposed to be constructed under the Build-Operate-Own-and-Transfer model, but the committee will finalise the model."

The cabinet had earlier sent the proposal to Economic Infrastructure Committee under the cabinet to discuss the ambitious project that has been in the pipeline since long to overcome the problems of frequent transportation strikes.

"The cross-border petroleum pipeline to import fuel from India is expected to help reduce transport cost by around 50 per cent and ease constraints in transportation caused by transportation strikes apart from leakage control and quality control," according to NOC.

The pipeline was estimated to cost Rs 1.60 billion excluding the cost of land acquisition. A pre-feasibility study done in 2004, and a technical study done in 2006, had concluded that the pipeline project would be economically viable within six to seven years, and the construction company will get its return on the investment. "IOC had, thus, earlier asked to sign a 10-year agreement," the corporation added.

Though Indian Oil Corporation had proposed the construction of the pipeline in 1995, NOC and IOC signed the agreement last April.

Earlier, the High-Level Petroleum Sector Reform Committee led by then Constituent Assembly member Bhim Acharya had recommended starting the project immediately as petroleum products are the largest imports of the country. In the four months of the current fiscal year 2012-13, the country has already imported petroleum products worth Rs 31.96 billion, whereas in the last fiscal year, the country had imported petroleum products worth Rs 92.25 billion from India, according to the central bank data.

Nepal is becoming more dependent on petroleum products — MS, HSD, SKO, ATF and LPG — for meeting its energy requirements with an annual increase of 20 per cent. Petroleum products constitute about 11 per cent of the total energy consumed in the country.

The Raxaul depot that caters to the energy hungry central region that consumes around 70 per cent of total petroleum imports can also supply fuel to Bhairahawa and Biratnagar which will also reduce huge costs of NOC that claims that in the future the pipeline could be linked to Barauni depot for more supply.

Currently, some 1,180 tankers of some 494 transporters ferry petroleum products across the country. But they have been creating problems for NOC by forcing it to increase transportation cost by not allowing it to issue a tender.

Petrol price down, diesel up

Date – Petrol – Diesel/Kerosene – Cooking gas
December 22 – Rs 123 –Rs 99 –Rs 1,470
September 2 – Rs 125 – Rs 97 – Rs 1,470
June 19 – Rs 120 – Rs 93 – Rs 1,415
March 26 – Rs 120 – Rs 89 – Rs 1,415
February 24 – Rs 116 – Rs 85 – Rs 1,415
January 26 – Rs 112 – Rs 81 – Rs 1,415
January 18 – Rs 115 – Rs 85 – Rs 1,500
(Price per litre except for cooking gas, which is per cylinder. Source: Nepal Oil Corporation)