Fuel prices to be revised every month

KATHMANDU, August 17

Citing supply distortions in the days preceding the revision of fuel prices, Nepal Oil Corporation (NOC) — the state-owned petroleum supply monopoly — has now decided the rates of petroleum products will only be revised every month, against every two weeks earlier.

While introducing the automatic pricing mechanism on September 29 last year, the Ministry of Commerce and Supplies (MoCS) — the parent ministry of NOC — had said that the fuel prices would be revised every fortnight based on the international market rate.

The fortnightly revision of the fuel price had been creating problems in the fuel supply because the volatility of the prices discouraged fuel station owners to purchase fuel from NOC in the few days prior to the revision date. This had been creating supply crunch at least twice a month.

“If we start revising prices only once a month, the supply system will not be affected as such,” reasoned Sita Ram Thapaliya, spokesperson for NOC.

The fuel rate is fixed based on the price list that NOC receives from its sole supplier, Indian Oil Corporation, every fortnight — the first and 16th working day of the English calendar.

“The automatic pricing mechanism provision has stated that fuel prices will be revised every fortnight depending on comfortability, but mandatorily once

a month,” said Thapaliya, adding, “Hence, the rule doesn’t compel us to revise the fuel prices every fortnight, which is why NOC is going to revise the fuel prices every month.”

After the enforcement of the automatic pricing mechanism, NOC had revised the prices of petroleum products every fortnight for some months.

However, recently the mechanism that allows upward or downward revision of up to two per cent of prices of petroleum products has not been enforced properly.

Last time NOC had revised the fuel prices, including of cooking gas and aviation turbine fuel, through a board level decision on August 2.

At normal times, NOC itself can revise prices of petrol, diesel and kerosene based on the automatic pricing mechanism.

It has to be noted that in the international market, the price of crude oil has slumped from $57.5 per barrel on July 17 to $49.03 per barrel on Monday. One barrel is equivalent to 159 litres.