Nepal | July 16, 2020

BPPL to get NOC nod to sell petrol

Himalayan News Service
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Kathmandu, March 7

At a time when the situation is gradually normalising along with increased supply from Indian Oil Corporation, Nepal Oil Corporation (NOC) — the state-owned petroleum company — has shown interest to allow privately-owned Birat Petroleum Pvt Ltd (BPPL) to sell petrol through its dealers.

This issue has come into light as NOC, in response to the query put forth by the Department of Supply Management and Consumer Protection (DoSMCP), is planning to recommend giving consent to BPPL to sell petrol.

The BPPL had sought permission from the government to sell petrol at a price which is 51 per cent higher than the market rate. Initially, the company had sought permission to sell 132,000 litres of petrol at Rs 155 per litre. However, a few days later, the company revised down the price to Rs 150 per litre, according to DoSMCP.

Currently, NOC has been selling petrol at Rs 99 per litre in the domestic market.

According to a high-level source at the NOC, the state-owned company has prepared its response to the DoSMCP citing it would be rational to allow BPPL to sell petrol in the Valley as a supportive measure to NOC’s effort in maintaining smooth supply.

Even as it has been nearly a month since the supply of fuel from India resumed through all trading routes, NOC has completely failed to maintain smooth supply of fuel in the Valley, which constitutes one-third of the country’s total fuel demand.

Gokul Prasad Dhital, director general of DoSMCP, informed that after receiving NOC’s consent, the department will
forward the file to the Ministry of Supplies for its approval.

The Ministry of Supplies had formed a committee led by the director general of the DoSMCP and comprising officials from the Nepal Bureau of Standards and Metrology, Department of Customs, NOC and also from supply ministry to take the final decision after appraising the price and quality of the fuel imported by private firms in the wake of fuel crisis.

The government has issued temporary licence to 34 private firms to import fuel for six months from the date of issuance. “The committee meeting will allow the BPPL to sell petrol only after receiving consent from the parent ministry,” said Dhital. Approval from the DoSMCP director general-led committee is a must to sell fuel in the retail market.

BPPL had imported five tankers, around 97,000 litres of petrol, in January and had set the price of petrol at Rs 190 per litre during the fuel crisis and sold the fuel from three dealers of NOC. BPPL had sought permission from DoSMCP two weeks ago to sell additional 132,000 litres of petrol, which was imported recently.

DoC grants licence

KATHMANDU: Even after all trade routes with India have reopened and supply has started normalising, the Department of Commerce (DoC) has continued to issue temporary licence to private firms to import fuel. DoC recently issued licence to two additional firms — Bhudev Trading, Biratnagar and Rauniyar Brothers and Company, Birgunj — taking the total number of licence recipients to 34. However, only three firms are importing fuel at present. Except for Birat Petroleum, the two other firms — Samriddhi Oil and Karmam Bhagyam — have been supplying fuel to bulk consumers, which does not require permission from Department of Supply Management and Consumer Protection for sales. Private firms started obtaining licence after the government’s decision to open up import of petroleum products for the private sector on October 19. All the 34 private sector firms have been allowed to import fuel on a temporary basis (for six months) without fulfilling the basic requirements, such as licence fee, paid-up capital requirement and storage facility, set by the government for private companies that want to be involved in the petroleum business for the long term.

A version of this article appears in print on March 08, 2016 of The Himalayan Times.

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