Officials seem to be mixing global tender with licence issuance to private firms

Kathmandu, November 4

After dilly-dallying in awarding the global tender to import fuel saying none of the bids were feasible and finally awarding the contract to a Nepali company, Nepal Oil Corporation (NOC) seems to be trying to downplay its decision.

“After carefully evaluating all the proposals, we decided to award the contract to Birat Petroleum Pvt Ltd, which had proposed to supply fuel at the most cost effective rate,” said Mukunda Ghimire, director of NOC.

As per the proposal submitted by Birat, it will buy petrol and diesel from Siliguri depot of Bharat Petroleum Corporation and sell the petrol to NOC at Rs 199 per litre and diesel at Rs 178 a litre. The quoted rates are 91.35 per cent and 119.75 per cent higher than the existing market price of petrol and diesel, respectively.

Interestingly, the government had issued a gazette notice on October 19 — four days after inking the agreement with Birat Petroleum — allowing private companies to import fuel and has even issued licence regarding the same to altogether 11 interested private firms till date.

According to NOC’s Acting Deputy Managing Director Sushil Bhattarai, since the government has allowed private firms to import fuel, NOC will not be compelled to purchase fuel from Birat Petroleum because the company can directly sell fuel in the market as per the law.

Though the issuance of licence is not related to the global tender, Bhattarai reasoned, “Earlier private companies were not allowed to import fuel and sell it in the domestic market, but since the government has now allowed them to do so, Birat Petroleum can also sell fuel in the market directly.”

However, a high-placed NOC source has claimed that the corporation is liable to purchase the fuel as per the contract signed with Birat Petroleum and that NOC might have already released partial payment to the latter.

As the country started to reel under acute fuel shortage after NOC’s sole supplier Indian Oil Corporation massively reduced the quantity of supply to fuel tankers citing security concerns due to the Tarai protests, NOC had issued a global tender on October 8 inviting interested parties to submit their expression of interest to supply fuel

to the country.

Over 19 firms from various countries had shown interest to supply fuel to fuel-strapped Nepal and NOC was supposed to sign an agreement with a reliable party within a week of publishing the notice. NOC apparently signed the deal with Birat Petroleum on October 15 — a few days before all government offices were shut for the Dashain holidays.

NOC had asked for supply of 200 kl of diesel, 100 kl petrol, 200 kl aviation turbine fuel and kerosene and 100 tonnes of liquefied petroleum gas each day for 15 days in the first lot to resolve the immediate crisis, as the festive season was nearing back then.

However, the NOC source informed that neither the supply quantity nor the period have been mentioned in the contract with Birat Petroleum.

Reportedly, NOC plans to purchase fuel from Birat Petroleum and sell it at a subsidised rate in the domestic market. Birat Petroleum will bring petrol and diesel via Siliguri-Kakadvitta.