Kathmandu, December 22

Four days after Nepal Oil Corporation (NOC) hiked the prices of petrol, diesel and kerosene, a sub-committee of the Legislature-Parliament has directed the government to roll back the price hike.

The sub-committee of Committee on Commerce, Industry and Consumer Welfare Relation of the Parliament today directed the Ministry of Supply (MoS) to roll back the fuel price hike citing that the recent price hike was untimely and against the mandate of Automatic Fuel Pricing Mechanism of the government.

“The price hike was untimely and only adds to the burden of consumers, especially because oil price has been falling in the international market,” said Subash Chandra Thakuri, chairman of the sub-committee, adding that reasons that were presented to the committee by NOC for the price hike were not satisfactory.

NOC had increased the price of petrol, diesel and kerosene by Rs 4.5 per litre each effective from Monday. It had defended the price hike citing the increased rate of petroleum products sent by its sole supplier — Indian Oil Corporation (IOC) — for the second half of December. Similarly, NOC had also mentioned that the hike aimed to bring down the price gap in petroleum products in the southern border areas.

Price of petrol and diesel in Bihar of India is dearer by Rs 12 per litre and Rs 18 per litre, respectively, as compared to their prices in Nepal. Countering this reason given by NOC, Thakuri said, “It seems that NOC increased the rate unscientifically in the name of controlling fuel smuggling in the southern border areas.”

The sub-committee also said current price hike in petroleum products is against Automatic Fuel Pricing Mechanism of the government which requires NOC to control price hike through its Price Stability Fund which currently has Rs 2.83 billion. Also, the mechanism also does not allow NOC to revise price of petroleum products in excess of two per cent.

“As the current hike in fuel rate seems unwanted from different aspects, MoS should rightly roll back NOC’s decision,” Thakuri said.

Meanwhile, the sub-committee has also asked NOC to present details of taxes that it has levied through fuel price on consumers under headings like Price Stability Fund, Infrastructure Tax (Budhigandaki), Infrastructure Tax (NOC), and Pollution Control Tax, among others.

Addressing the committee meeting, Secretary of MoS Prem Kumar Rai alleged that the NOC had not coordinated with the ministry while adjusting the fuel rates or while making other decisions either. However, Rai said that MoS would minutely cross-check the parameters behind the current price hike before taking any decision regarding the new adjustment.