Nepal | August 10, 2020

Fuel storage expansion pact with China likely during PM Oli’s visit

Himalayan News Service
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Kathmandu, May 23

The government is likely to ink a pact with the Chinese government regarding the construction of fuel storage facilities across different parts of the country during Prime Minister KP Sharma Oli’s visit to the northern neighbour in the near future.

A high-level government source informed The Himalayan Times that necessary groundwork is being done for the two governments to sign a memorandum of understanding (MoU) regarding construction of fuel storage facility in Nepal during PM Oli’s China visit.

Though the actual date of Prime Minister Oli’s visit to China is yet to be decided, government officials at different levels have been saying that it will possibly be after the fiscal budget is released on May 29.

As Nepal has already requested the Chinese government to develop fuel storage facility earlier, Oli’s visit this time is expected to seal the deal with China.

In a bid to expand storage capacity of petroleum products in the country, the government had earlier announced to set up fuel storage facilities in Khaireni of Tanahu, Battar of Nuwakot, and Panchkhal of Kavre. With limited resources and technical knowledge on hand, the government had sought Chinese technical and financial assistance for the construction of fuel storage facilities in the aforementioned places.

“We have no idea on PM Oli’s agendas during his visit to China. However, the government had recently sought details on feasible places for the construction of petroleum storage facilities from Nepal Oil Corporation (NOC),” said Sushil Bhattarai, acting deputy managing director of NOC.

Considering the increasing demand of petroleum products in the Capital, NOC has planned to develop a storage facility with capacity to stock around 70,000 kilolitres of fuel in the Valley. Construction of fuel storage facility by the Chinese government is also a part of NOC’s plan to enhance the petroleum storage capacity.

In 2016, NOC had proposed the government to increase total fuel storage capacity to 415,000 kilolitres from the existing 72,000 kilolitres at a total cost of Rs 28 billion within five years.

However, fuel storage facility expansion plan of NOC has not gained momentum in recent months, especially after its management and leadership were dragged into a controversy over financial irregularities while purchasing land plots meant for development of petroleum infrastructure.

As the current storage of petroleum products can cater to the domestic demand for less than one week, expansion of fuel storage facility is crucial to end the perennial fuel crisis.

A version of this article appears in print on May 24, 2018 of The Himalayan Times.

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