Kathmandu, November 6

The government is preparing to allow government enterprise, National Trading Ltd (NTL), to enter into petroleum trading with China by making NTL a subsidiary institution of state-owned Nepal Oil Corporation (NOC).

The Ministry of Supplies (MoS) has already formed a committee under the coordination of Joint Secretary Mukunda Poudel and other experts to study the feasibility of entering into petroleum trading with China by making NTL a sister company of NOC.

“A committee has been formed to study its possibility. Nothing can be said until committee submits its report,” MoS officials said.

Managing Director of NOC Gopal Khadka, a few days back, had told The Himalayan Times that groundwork was being laid to allow NTL to import petroleum products from China by merging NTL with NOC. “MoS is working to make this happen,” Khadka had said.

Moreover, the government has already announced that NTL and NOC would soon be merged to strengthen the capital base of the state-owned oil company. Through the budget statement for this year, the government had announced to merge different low functioning state-owned enterprises.

“Instead of allowing NOC, the government plans to enter into fuel trade with China through NTL so that it will not hamper the understanding, mutual relationship and agreements with Indian Oil Corporation (IOC),” an NOC source said.

The issue of Nepal’s fuel trade with China, however, is not new. It became a major issue after the four-month long border blockade last year. As the market witnessed acute shortage of petroleum products following the blockade, Nepal started looking at other avenues for fuel imports.

Moreover, NOC signed a framework agreement with Chinese oil company — Petro China. The Chinese government even provided 1,000 metric tonnes of petroleum products to Nepal to address the crunch that resulted after the border blockade.

Visit of the then prime minister KP Sharma Oli and then foreign minister Kamal Thapa to China last year and discussions about fuel trade with their Chinese counterparts gave hopes of a commercial deal between the two countries regarding petroleum trading.

However, a commercial agreement between the two countries has been deferred constantly after the blockade was lifted and IOC started providing normal supply of fuel. Commercial fuel trading with China, which was a major issue of the then government, slowly faded away following the end of the petroleum crisis.