Market uncertainty delays NOC's plan to restart bitumen business

Kathmandu, August 28

The state-owned Nepal Oil Corporation (NOC) is unlikely to restart bitumen trading soon following uncertainty over the market of the product.

Earlier in March, NOC had announced it would resume the bitumen business, which the corporation had stepped out of in 1996, within a few months. However, uncertainty of the domestic market for bitumen has deferred NOC's plan to start bitumen trade.

Prior to starting the bitumen trade, NOC wants the government to assure the consumption of bitumen imported by the corporation in all government-run projects and has been lobbying with the government to introduce a legal provision that ensures the use of NOC's bitumen in state-owned projects.

Bitumen is a mixture of hydrocarbons and is basically used for road surfacing and roofing.

“The plan has been deferred as there has to be market assurance of bitumen before we import it. We have formally requested the government to make government projects mandatorily consume our bitumen,” said Sushil Bhattarai, acting deputy director general of NOC, adding that NOC will start importing bitumen as soon as the government ensures a market for the product.

In a bid to address demand for high-quality bitumen in the country, NOC plans to import the product from different production plants of Indian Oil Corporation (IOC).

As per Bhattarai, IOC is ready to supply high-quality bitumen to NOC and has been seeking information on the quantity of bitumen that NOC wants to import. “However, we have not been able to decide on the import quantity of bitumen following uncertainty of market for the product,” he added.

Meanwhile, NOC plans to hold a meeting with the Ministry of Physical Infrastructure and Transport and Department of Roads soon to seek market for NOC's bitumen.

NOC plans to restart the bitumen business considering the rising number of complaints about the low quality of this road surfacing material in the domestic market.