Nepal | May 28, 2020

Dealers flay NOC plan to operate fuel stations jointly with IOC

Himalayan News Service
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Officials of Nepal Oil Corporation and Indian Oil Corporation exchange the MoU on fuel supply for five years. Nepal’s Minister for Supply Deepak Bohara and India’s Minister of State for Petroleum and Natural Gas Dharmendra Pradhan, in New Delhi on March 27, 2017. Photo: PIB India

Kathmandu, May 14

Petroleum dealers in the country have criticised the government for its preparation to open petrol pumps in the country in joint-venture with Indian Oil Corporation (IOC).

They have said that this decision of the government will not only strengthen IOC’s monopoly regarding fuel supply to Nepal, but will also put businesses of Nepali petroleum dealers at risk. “The government’s preparation to open fuel stations in partnership with IOC will certainly have a negative impact on the domestic petroleum sector,” said Lilendra Pradhan, president of Petroleum Dealers Association of Nepal, adding allowing IOC to open fuel stations in Nepal will compel many domestic petroleum dealers to close their business.

Dealers also said that the decision to welcome IOC in fuel retail business of Nepal is against the sovereignty of the country and the decision should be revisited as soon as possible. “As per the direction of Nepal Oil Corporation (NOC), a majority of domestic dealers have already started work to upgrade their fuel stations. Moreover, the private sector has also applied for the construction of model petrol pumps as per the government set standard,” Pradhan said. In this context it would not be acceptable for us to allow a foreign oil company to enter the domestic fuel business, he added.

Based on a request made by Minister for Supplies Deepak Bohora to Indian petroleum minister to support Nepal in constructing high-tech fuel stations, IOC had shown interest to construct such fuel stations in joint venture with NOC. During the NOC-IOC Supply Agreement renewal ceremony held in April, Minister Bohora had urged the Indian government to build almost 100 ‘model petrol pumps’ in Nepal in partnership model.

Following this, a high-level team of IOC had visited Nepal last week to study the operation of such model petrol pumps in Nepal together with NOC. The two oil companies had also agreed that NOC would have 51 per cent stake in all such fuel stations.

“Instead of allowing IOC to operate fuel stations, NOC and fuel dealers together should work to improve the standard of domestic fuel stations and enhance the oil supply mechanism,” Pradhan added.

Meanwhile, NOC officials said that the aim to partner with IOC to operate some high-technology fuel stations was to introduce international standard fuel stations and distribution system in Nepal.

Amending the Fuel Distribution Bylaw two months ago, NOC had envisioned construction of high-tech fuel stations in the country with different facilities like card swiping, well-managed cafeteria, ATM lounges, vehicle washing and repairing system, multiple nozzles to fill fuel, availability of regular water and power supply along with separate toilets for men, women and handicapped people, among others.

A version of this article appears in print on May 15, 2017 of The Himalayan Times.

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