Kathmandu, December 19

The state-owned Nepal Oil Corporation (NOC) has recently sought compensation from the government for the loss that the entity incurred during the elections after the government barred the corporation from increasing the price of petroleum products as per the revised rates sent by Indian Oil Corporation (IOC).

As per NOC, the organisation incurred loss amounting to almost Rs one billion after the government restricted NOC from hiking fuel price amid rising global oil price. Had the government not restricted NOC from implementing automatic pricing mechanism in petroleum products during the elections, the corporation would not have to bear loss to this extent, according to NOC officials.

The state-owned fuel supplier had hiked the price of different petroleum products on November 1 on the basis of fuel rates sent by IOC. However, the government had revoked the corporation’s decision to jack up prices of petroleum products citing that fuel price adjustment during elections was untimely.

“We have sought compensation from the government as the government’s intervention in price adjustment in November has added to NOC’s financial burden. We have claimed compensation at the Office of Prime Minister and Council of Ministers via the Ministry of Supplies (MoS),” informed Sushil Bhattarai, acting deputy managing director of NOC.

As a result of the government’s intervention in adjusting fuel price, NOC had started incurring loss from the beginning of November though the company had been recording fortnightly profit of Rs 180 million till October.

Bhattarai informed that NOC had to incur loss amounting to almost Rs 110 million every fortnight at present.

Immediately after the elections, NOC had hiked the price of all petroleum products on December 8. The corporation had increased the price of petrol and diesel by two rupees per litre and three rupees per litre, respectively. Price of cooking gas had been hiked by Rs 25 a cylinder. Similarly, NOC increased the price of kerosene by three rupees per litre, aviation turbine fuel (ATF) by five rupees a litre and ATF price for international carriers by $100 per kilolitre.

Moreover, NOC management has also decided to increase price of petrol, diesel and kerosene by one rupee per litre each effective from Wednesday.

With this adjustment in fuel price, diesel and kerosene will cost Rs 88 per litre each and petrol will cost Rs 101 per litre in the domestic market. However, price of LPG and ATF has been kept unchanged this time. While LPG costs Rs 1,350 per cylinder at present, ATF for domestic airline companies and foreign airline companies costs Rs 87 per litre and $850 per kilolitre, respectively.