Kathmandu, October 16:

The government of India today directed the Indian Oil Corporation (IOC) - the sole petroleum products’ supplier to Nepal Oil Corporation (NOC) - to supply petroleum product’s smoothly.

The Indian government during the visit of Prime Minister Puspa Kamal Dahal ‘Prachanda’ committed that it would provide a credit of upto IRs 1,500 million to Nepal for the next three months to ensure uninterrupted petroleum products’ supplies.

“We are waiting to get the duty draw back to the tune of Rs 610 million,” NOC managing director Digamber Jha said.

That apart, NOC is waiting for financial institutions to provide it loans. “The cabinet decided on September 4 to provide NOC Rs 3 billion from various financial institutions for smooth supplies,” said Jha adding that it has, however, got only Rs 1 billion from Citizen Investment Trust (CIT) while other financial institutions were not very keen on lending.

NOC also has to get Rs 840 million VAT refund that it overpaid to the Inland Revenue Department. Meanwhile Nabindra Raj Joshi, Constituent Assembly member, who lobbied for the working capital of NOC during the acute shortage, said the Finance Ministry has asked NOC to audit its last year’s account and then reclaim the overpaid VAT.

“NOC can get collect advance from all petroleum dealers,” Joshi suggested. “Since there is no loss at current price, they will happily deposit the advance.”

According to the pricce list sent by IOC yesterday, NOC is in profit of around Rs 10 million.

“If NOC ensures that the profit it gets will be deposited directly to banks, any financial institution will be ready to lend NOC,” Joshi added. Joshi said NOC could adjust price as it was in profit but Jha clarified until Tihar NOC was unable to take any decision on price adjustment.