Nepal Oil Corp refuses to reduce fuel price

Kathmandu, January 5

Going against the direction of the Parliamentary sub-committee on Commerce, Industry and Consumer Welfare Relation, Nepal Oil Corporation (NOC) has refused to bring down the price of petroleum products citing that its sole supplier, the Indian Oil Corporation (IOC), has increased the rate of petroleum products for the first half of January.

Talking to The Himalayan Times today, Bhanubhakta Khanal, spokesperson for the NOC, confirmed that the price of petroleum products will not be adjusted for January.

“IOC has increased the price of diesel and liquefied petroleum gas (LPG) for the first half of January and NOC is bearing a loss on these two products,” said Khanal, adding that the corporation is not in a position to reduce the fuel price at this point in time.

However, NOC Managing Director Gopal Bahadur Khadka, a week back, had said that NOC would adjust fuel price for January.

According to Khanal, NOC’s loss on diesel has increased to Rs 1.5 per litre and to Rs 78.24 per cylinder on cooking gas. However, NOC makes a profit of Rs 1.33 per litre on petrol.

“Though the House panel had directed NOC to roll back the recent price hike of petroleum products and reduce their prices further, IOC has been increasing oil price in recent months,” added Khanal.

The Parliamentary sub-committee, on December 22, had directed NOC to roll back its decision of December 19 to increase price of petrol, diesel and kerosene by Rs 4.5 per litre each citing that the decision was untimely and against the Automatic Fuel Pricing Mechanism of the government.

NOC had defended its decision citing that hike in price of petroleum products was needed to bring down price gap of petroleum products in border areas.

Similarly, it had also attributed the price hike to a surge in rate of petroleum products sent by IOC.

However, the Parliamentary sub-committee had directed the Ministry of Supplies (MoS) and NOC to roll back its decision charging that NOC management had increased fuel rate by more than two per cent though government mechanism does not allow it to do so.

Similarly, the House panel had also said that controlling fuel smuggling in southern border areas is not under the jurisdiction of NOC and MoS.

“We are not satisfied with the clarification that NOC has presented in defending the price hike. Looking at the clarification, it seems that NOC just wants to defend its move at any cost,” said Subash Chandra Thakuri, chairman of the committee, adding that the committee will call a meeting soon among all the stakeholders, including Ministry of Finance and Ministry of Home Affairs, to discuss the fuel adjusting mechanism, gap in price of petroleum products in border areas, among others.