Kathmandu, May 18:

The government is neither going to hike the petro prices nor is it granting loan to the cash-stripped national oil monopoly Nepal Oil Corporation (NOC).

Finance Minister Dr Ram Sharan Mahat, speaking at an interaction here today at the Reporters’ club, said, government is not in a position to revise the fuel price. “Government cannot either continue lending NOC,” he said, adding, “though it has become mandatory to revise the prices of petroleum products at the earliest”.

“Apart from that, the current government has no plans to take any long-term decision regarding the fuel prices,” he added.

Last week, NOC had asked the government Rs 2 billion loan. “Or readjust the prices of petroleum products,” NOC has asked the government. Government has last week decided to grant Rs 800 million to the NOC to maintain smooth supply of petroleum products. The amount would be paid to the Indian Oil Corporation (IOC), the sole supplier of the petro-products to Nepal.

However, the grant amount is only 40 per cent of what the state-run petroleum supply utility has asked from the government to pay its due to various financial institutions including the IOC. With the skyrocketing petroleum prices globally- the monthly loss of NOC has already crossed Rs 1.67 billion. The outstanding dues of NOC has crossed already Rs 13 billion, including Rs 6 billion loans it had taken from the government at various times, Rs 2.15 billion from the commercial banks, Rs 2.50 billion from Citizen Investment Trust and Employees Provident Fund. The outstanding dues that NOC owes to IOC currently stands at Rs 2.50 billion.

NOC has already slashed the daily supply of petroleum products in the Valley by about 50 per cent, citing a failure to pay its dues to IOC — that currently stands at over Rs 2.50 billion — on time. As a result, many private petrol pumps have already pulled down the shutters, while long queues can be seen at petrol pumps across the country. The crisis is deepening but there seems no immediate solution.

NOC has also proposed to make the prices of diesel and kerosene alike and provide subsidy to the students and poor people. The proposal has also recommended limiting the existing state subsidy on cooking gas to one cylinder per family a month. If a family consumes more than one cylinder in a month, it has to get other cylinders at import price, which will be around Rs 1,430 per cylinder.

The proposed hike in petrol is Rs 8 per litre, which will make it Rs 88 for petrol from the present Rs 80 a litre.