Kathmandu, August 29:

It’s an old familiar story: NOC has failed to pay and IOC has slashed supply to it.

Kathmanduites are likely to face an acute shortage of cooking gas ahead of Dashain, as the Indian Oil Corporation (IOC) has cut liquefied petroleum gas (LPG) supply by over 30 per cent. IOC took this step as the Nepal Oil Corporation (NOC) failed to clear its dues.

“A serious crisis looms ahead with the demand for LPG rising,” says Sabarmal Agrawal, president of the Nepal LPG Industry Association. He says that IOC has cut supply to about 6,000 metric tonnes (MT) for August against a monthly regular supply of over 8,200 MT.

After other major petroleum products such as petrol, diesel and kerosene, the supply cut has come to LPG, admits Ichha Bikram Thapa, spokesperson at NOC, adding that only about 6,000 MT have been loaded for August. He agrees that cut has come because of NOC’s failure to clear the dues and regular monthly bills to IOC, Nepal’s sole petro-products supplier. The NOC’s outstanding dues with IOC have crossed Rs 3.2 billion.

As a result, IOC has cut regular supply of petroleum products by 45 to 50 per cent in the last two months, says Thapa, adding that NOC paid Rs 1.43 billion for the month of August, which was supposed to be Rs 2.30 billion Indian Currency (IC). Currently NOC’s monthly loss is over Rs 310 million. Over half of its loss comes from the supply of LPG, since price disparity in LPG is as high as of Rs 277 per cylinder. NOC is losing over Rs 160 million a month on this count, say NOC officials.

Agrawal estimates that Nepal needs over 10,000 MT of LPG during the festival time.