Kathmandu, March 8

The Indian Oil Corporation (IOC) has agreed to reduce marketing charge that it has been levying on fuel supplied to Nepal from 2.5 per cent per to two per cent.

The review meeting of Supply Agreement between IOC and Nepal Oil Corporation (NOC) decided to reduce the marketing charge on fuel products in the new Supply Agreement between the two oil giants that comes into effect from April 1, Sitaram Pokhrel, spokesperson for NOC, informed The Himalayan Times.

A review meeting of the Supply Agreement, which ends on March 31, is underway in the Capital between high-level officials of IOC and NOC. The new Supply Agreement will be in force until March 31, 2022.

“IOC has agreed to reduce marketing charge on fuel in the new Supply Agreement. This will reduce NOC’s cost by more than Rs one billion annually,” Pokhrel said, adding that the decision to slash the marketing charge will also directly benefit Nepali consumers.

The review meeting has also agreed to appoint independent surveyor (from a third country) in all oil depots of IOC from where Nepal takes loading to deal with all issues related to fuel supply to Nepal.

“The surveyor will be responsible to cross-check the quality and quantities of fuel being supplied to Nepal at Indian oil depots and will also monitor the oil calibration issues,” Pokhrel said. NOC will soon announce a global tender to appoint the independent surveyor, he added.

The review meeting also agreed to introduce a provision in the new Supply Agreement that would allow Nepal to import fuel from third countries in case IOC is unable to ensure regular supply of petroleum products to Nepal.

Similarly, IOC has also agreed to waive interest levied on NOC for delays in payment. NOC makes payment of petroleum products to IOC twice a month — on each eighth and 23rd day of a month. IOC had been slapping interest charge on NOC for every day in case of payment delay.

Likewise, both IOC and NOC agreed to implement security locking system in all the vehicles used to supply petroleum products to Nepal.

“Basically, we have tried to make the new Supply Agreement as flexible as possible and IOC is positive to incorporate NOC’s suggestions in the agreement,” said Pokhrel.

The IOC will soon host a signature signing ceremony before the draft of the new Supply Agreement comes to effect from April 1.

Draft highlights

• Nepal to be allowed to import fuel from third countries in case IOC is unable to ensure regular supply
• An independent surveyor to be appointed in all IOC depots supplying fuel to Nepal
• Interest levied on NOC for delays in payment to be waived
• Security locking system to be installed in all vehicles used to supply petroleum products to Nepal