Increment in price of petroleum products draws criticism
Kathmandu, December 19
The government’s announcement to hike price of petroleum products from today has drawn severe criticism from consumer rights activists.
Nepal Oil Corporation (NOC) has been charged of not reducing fuel price suitably when oil price falls in the global market and increasing the rate significantly as soon as oil price goes up in the international market. Furthermore, they also said that the new adjustment in fuel price was impractical as NOC has been making huge profit in recent months.
Citing that its sole supplier, Indian Oil Corporation (IOC), has increased fuel rate for the second half of December, NOC had increased prices of petrol, diesel and kerosene by Rs 4.5 per litre effective from today. With the revision, petrol costs Rs 101.5 per litre while diesel and kerosene cost Rs 77.5 a litre each.
“NOC has a tendency to immediately hike fuel price when price goes up slightly in the international market. However, it is reluctant to reduce the fuel price scientifically when oil rate plummets,” Madhav Timalsina, president of Consumers’ Rights Investigation Forum (CRIF) said, adding that NOC’s tendency of adjusting fuel rate is completely impractical and unscientific.
The current price hike is impractical also because it has come at a time when the enterprise is making monthly projected profit of more than Rs 140 million, according to Timalsina. “NOC could have controlled the price hike in domestic market through its own Price Stability Fund where a huge sum of money is sitting idle,” added Timalsina.
As per data available in NOC’s website, the fuel supplier is currently making profit of Rs 5.72 per litre in petrol, Rs 1.28 per litre in kerosene and Rs 2.76 per litre in aviation turbine fuel. NOC is incurring loss of 0.4 paisa per litre in diesel and Rs 6.05 per cylinder in liquefied petroleum gas (LPG).
However, NOC has said the price hike was necessary not only due to surging price of oil in the international market, but also to bring down the gap of price difference in southern border areas.
“There was a significant surge in fuel rate sent by IOC for second half of December, which left us no option but to increase the fuel price in the local market,” Bhanubhakta Khanal, spokesperson for NOC told The Himalayan Times, adding, “It was also necessary to increase the price of petroleum products to cope with possible fuel smuggling in southern border areas due to fuel price difference in Nepal and India.”
As per today’s rate, the price of petrol in Bihar of India is dearer by Rs 12 per litre compared to petrol price in Nepal. Similarly, price of diesel in Bihar is costlier by Rs 18 per litre compared to its price in Nepal.