Kathmandu, October 7

Nepal Oil Corporation (NOC) has received approval from its board to mobilise the resources from the Price Stabilisation Fund (PSF) to soothe the rising fuel price in the domestic market.

Amid soaring price of gasoline in the international market, using resources from PSF - which has almost Rs four billion collected from NOC's earlier profits - will ensure that fuel price does not go up further in the domestic market for at least a few weeks, according to Sushil Bhattarai, acting deputy managing director of NOC.

However, the decision of the NOC board to mobilise the PSF resources must be approved by the Ministry of Industry, Commerce and Supplies (MoICS).

“We are optimistic that the MoICS will endorse the recommendation made by the NOC board,” said Bhattarai.

With the constant rise in global gasoline price, the state-owned fuel supplier is reeling under huge financial pressure. However, mobilisation of PSF is expected to provide relief to NOC for the time being.

“The mobilisation of PSF will only be a short-term measure to control the ballooning fuel price and fuel price is bound to go up further if the global gasoline price keeps surging,” Bhattarai informed, adding that NOC will, however, not increase the price of petroleum products before Dashain.

As per NOC, it currently incurs a monthly loss of almost Rs 1.3 billion as per the fuel rate of Indian Oil Corporation (IOC) forwarded to NOC. Also, according to NOC's own projection, the projected monthly loss of the corporation is expected to grow by another Rs one billion in the second half of October.

Bhattarai informed that the only option left with NOC is to implement the automatic fuel pricing mechanism more strictly. “We should now go for either daily fuel pricing mechanism in the country or at least fuel price should be adjusted on a weekly basis as per the international price,” he stated.