IOC to fix price based on daily int'l price

HIMALAYAN NEWS SERVICE

KATHMANDU: Indian Oil Corporation (IOC) has agreed to the spot price mechanism which is expected to help Nepal Oil Corporation (NOC).

“IOC will fix petroleum price for Nepal on the basis of daily price of Platts/Argus — international petroleum organisation — and transportation cost to depots near the Nepal border,” said acting managing director of NOC Suresh Kumar Agrawal after signing the revised pact on the supply of petroleum products between NOC and IOC here today.

The revised pact will be in effect for the next five years till March 31, 2017. The earlier pact expired on March 31.

“IOC has also agreed to remove price adjustment tax applied in refinery margin and duty, which is almost two per cent,” he said, adding that the new provision will save around Rs 2 billion while importing petroleum products.

Likewise, IOC has also added Mumbai as a new petroleum import point for Nepal. Earlier, Haldia was the only import point.

The agreement has also stressed on maintaining quality of petroleum products. “There are sufficient provisions to control and regulate quality while importing and distributing petroleum products,” said Agrawal, adding that the construction of a pipeline from Raxaul to Amlekhgunj, and feasibility study of a pipeline for liquefied petroleum gas (LPG) also featured in the agreement.

IOC has granted one more import point for LPG — popularly known as cooking gas — including current refinery points Barauni, Haldia and Mathura. “Panipat has also been added,” he said.

However, the construction of a pipeline for petroleum products — petrol, diesel, kerosene and aviation fuel — was also in the earlier agreement signed five years back but there has been no progress on the issue except for a detailed project study.

Similarly, the revised agreement has also changed the payment system. NOC can now pay the petroleum price to IOC a day later than the fixed date, if the prescribed day is a public holiday. “The agreement has included trade of bitumen, lubricants and grease between IOC and NOC,” he said.

Likewise, Indian Oil Corporation has promised to help build a competitive market price, said Agrawal, after signing the revised pact on behalf of NOC, whereas commercial general manager of IOC R Karandikar signed the pact on behalf of the only fuel supplier.