NOC barred from giving bonus

Kathmandu, May 24

A sub-committee under the Parliamentary Committee on Commerce, Industry and Consumer Welfare Relations today directed the management of Nepal Oil Corporation (NOC) not to distribute the planned bonuses to its employees and shareholders.

The sub-committee meeting, which was coordinated by lawmaker Subash Chandra Thakuri, also directed the Ministry of Supplies (MoS) and NOC to transfer the allocated budget for bonus distribution to the price stabilisation fund of the company or invest it in the development of physical infrastructure of NOC itself.

The annual general meeting of NOC held last week had decided to distribute almost Rs 2.25 billion as bonuses to its staffers and shareholders. This is the total amount that NOC had separated for bonus distribution since the last four years.

Though NOC has been doing brisk business in the past few years, especially after it adopted automatic pricing mechanism in 2014, its attempt to distribute annual bonuses were barred by lawmakers time and again in the past too. This was because NOC was attempting to distribute bonuses despite accumulated loss in hand as the corporation then owed up to Rs 36 billion in dues to the government and various other financial institutions.

“It is praiseworthy that NOC, which was once debt-ridden, has paid all its dues and is now a financially strong institution. However, NOC has been overcharging customers since the fuel price started dropping in the international market,” Thakuri said, adding that NOC cannot claim the amount that it has accumulated by overcharging customers as ‘profit’.

Lawmakers charged that NOC, despite being a government enterprise, has been selling petroleum products by keeping a big margin. In fact, NOC has been making profit of four rupees per litre on petrol, Rs 16 per litre on kerosene and nine rupees per litre on aviation fuel. “NOC has been selling petroleum products at a price that is much higher than the cost price. How can money generated by hurting the consumers be called profit?” Thakuri questioned.

Despite making a profit in different fuels, NOC has not reduced fuel prices though Indian Oil Corporation (IOC) has reduced price of petroleum products for the first half of this month.

Meanwhile, Gopal Bahadur Khadka, managing director of NOC, said that NOC would discuss with MoS and its board about the execution of the sum that has been separated for bonus distribution.

The committee has also asked NOC to submit to the committee all the documents that were used while NOC cleared almost Rs 36 billion to the government and different financial institutions in the last few years.