Kathmandu, October 13

The country’s plan to start petroleum trade with China, which has been under discussion since the supply obstruction in the southern border in 2015, seems to have lost the priority of the government as the issue was not raised during the two-day visit of Chinese President Xi Jinping here in Nepal.

Prior to concluding Xi’s two-day visit today, Nepal and China inked 20 crucial bilateral agreements and memorandums of understanding. However, fuel supply from the northern neighbour to Nepal could not find space in the bilateral agreement.

Prime Minister KP Sharma Oli, during his visit to China in 2015, had sealed a framework deal to import petroleum products from the northern neighbour. Following this, government officials had been saying that internal discussions and bilateral talks with Chinese authorities were underway to diversify the country’s gasoline industry.

However, as the issue was not raised during President Xi’s visit, country is less likely to diversify its petroleum trade with China.

Stung by the blockade in the southern border during the Tarai unrest in 2015 that resulted in acute shortage of petroleum products in the country, Nepal had sealed fuel trade deal with China. A memorandum of understanding (MoU) to this effect was signed between Nepal Oil Corporation (NOC) and PetroChina Co Ltd, a subsidiary of state-owned China National Petroleum Corporation, regarding supply of petroleum products from China to Nepal on October 28, 2015, paving way not only for the two countries to start fuel trade, but also end Nepal’s sole dependency on India for supply of petroleum products.

At that time the government had even expressed its plan to import one-third of the consumption volume of petroleum products from China. The NOC had even started discussions on the quality, quantity, price, loading capacity, loading method, and the route to bring gasoline to Nepal from China.

Baikuntha Aryal, secretary at the Ministry of Industry, Commerce and Supplies, said that Nepal will diversify its fuel trade with different possible countries sooner rather than later. “The issue regarding fuel trade with China was not raised this time as we lack necessary infrastructure for petroleum trade with China, especially on the Nepal side. As soon as we are able to develop required infrastructure, we will enter into fuel trade with China,” he mentioned.