Nepal | May 27, 2020

Fuel dealers’ syndicate affects supply

NOC says flow will begin to normalise from today

Sujan Dhungana
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Locals queue to refill their bikes at a petrol pump in Pokhara, on Thursday, April 20, 2017. Photo: Rishi Ram Baral

Kathmandu, July 19

The abrupt decision of petroleum dealers not to collect fuel from the Thankot-based depot of Nepal Oil Corporation (NOC) on Tuesday resulted in a majority of petrol pumps in Kathmandu Valley remaining closed today. Meanwhile, serpentine queues had formed outside the limited few that were open for business — mostly those operated by the state agencies.

Demanding that the government re-examine the technical loss in petroleum products that dealers are facing, fuel dealers associated with Bagmati Petroleum Dealers’ Association (BPDA) had refused to collect fuel from NOC’s depot on Tuesday.

Consequently, a majority of fuel stations in the Valley remained shut today — creating panic among consumers and forcing NOC to its knees. Giving into the demands of the dealers, the regulatory government agency has initiated the study again to examine the technical loss in fuel during supply.

As their demand has been met, with the final report expected within 15 days, petroleum dealers today received the load from Thankot depot and NOC expects fuel supply to ease from Thursday.

“Dealers have been saying that the recent report on loss compensation of petroleum products does not match the actual loss that they are incurring. As we were in the process of compensating the dealers based on the findings of the report, they abruptly decided not to collect fuel from NOC on Tuesday,” Sitaram Pokharel, spokesperson for NOC, said.

He informed that the corporation supplied 750 kilolitres of petrol and diesel each in the Valley today and the supply is expected to ease starting Thursday.

The government report had showed that dealers have been facing technical loss amounting to 50 litres of petrol and 36 litres of diesel while supplying every 4,000 litres of fuel from NOC’s depots to their petrol pumps.

However, dealers have been claiming that they incur loss of up to 99 litres in petrol and 85 litres in diesel on every 4,000 litres of fuel transport. Petroleum dealers associated to BPDA said that the government report on loss compensation is not comprehensive and needs to be revisited.

“The report has not studied the technical loss that dealers face while transporting fuel from NOC’s depots to fuel stations in Tarai districts, where the temperature is relatively higher, thereby causing large volume of fuel to evaporate,” said BPDA President Achyut Khadka.

He added that only a report that is developed by studying the loss in fuel supply in Tarai, hilly and mountain regions would be acceptable for the association.

Meanwhile, consumer rights activists opine that the number of fuel stations operated by government agencies should be increased to break such syndicates of fuel dealers.

“Essential Service Protection Act of 2014 has clearly mentioned that the supply of essential goods should not be halted, no matter what. However, repeated occurrences like the one we saw today points towards government’s inability to effectively implement the prevailing laws,” said Madhav Timalsina, president of Consumer Rights Investigation Forum.

As NOC does not have its own fuel supplying mechanism in the domestic market, dealers have been encouraged to resort to their old antics of deliberately halting supply to get things done their way.

A version of this article appears in print on July 20, 2017 of The Himalayan Times.

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