Nepal Oil Corp reluctant to slash fuel prices

Kathmandu, February 18

The state-owned Nepal Oil Corporation (NOC), which increased fuel prices four times in the past two months owing to the global increase in the price of petroleum products, seems reluctant to slash fuel prices at present though the global fuel price has started to come down.

Indian Oil Corporation (IOC) — the sole supplier of fuel to NOC — has slashed prices of various petroleum products for second half of February. As a result, the projected fortnightly loss of NOC has come down to Rs 71 million from Rs 150 million projected on February 1.

However, NOC is not in the mood to adjust fuel prices this time though its officials had earlier defended regular increment in fuel prices citing effective implementation of the ‘automatic fuel pricing mechanism’, which mandates NOC to adjust fuel rates every 15 days on the basis of IOC’s rates.

This nature of NOC to immediately hike fuel prices during global surge and dilly-dallying to bring fuel prices down following global decline in fuel price is certain to hit Nepali consumers, who are already reeling under high inflation.

Meanwhile, NOC officials claim that fuel prices were not slashed significantly in the new fuel rates of IOC for the second half of February and that the corporation will adjust the rates on March 1 accommodating the current change in IOC’s fuel rates to the price rates that it sends for first half of March.

“Possibly, we will revise fuel rates for March,” said Birendra Goit, spokesperson for NOC.

Some NOC officials, speaking on the condition of anonymity, said that fuel prices were not adjusted this time despite global drop in price of petroleum products to recover the loss that NOC has been incurring in liquefied petroleum gas (LPG).

Currently, NOC has been incurring a loss of Rs 202 per cylinder in LPG. However, the corporation is making profit in all other petroleum products (petrol, diesel, kerosene and aviation turbine fuel).

Meanwhile, consumer right activists claimed that NOC often refers to automatic fuel pricing mechanism when increasing fuel prices, but forgets all about the mechanism every time fuel prices drop in the global market.

“With such anti-consumer activities, NOC is losing its years-long legacy,” said Madhav Timalsina, president of Consumer Rights Investigation Forum (CRIF).