KATHMANDU, JULY 27

Nepal Oil Corporation (NOC) has initiated the fuel storage capacity enhancement project with a target to raise the storage capacity of petroleum products in the country by at least 15 per cent by the end of the ongoing fiscal year.

The country today has fuel storage capacity of 70,000 kilolitres which includes the storage capacity of petrol, diesel and aviation turbine fuel (ATF). Surendra Poudel, managing director of NOC, informed that works have been initiated to raise the fuel storage capacity to 80,500 kilolitres by end of fiscal 2020-21.

Following the acute shortage of fuel in the domestic market in early 2016 owing to the supply obstruction in the southern border, the government had announced it would expand the country’s fuel storage capacity so as to cater to the domestic demand for at least three months. However, the government failed to materialise its plan as NOC faced land acquisition corruption scam. The project fell under low priority of the government and NOC since then.

“Though the project was halted due to various reasons in the past, we have given momentum to the project in the recent months as enhancing fuel storage capacity is of utmost necessity. However, NOC plans to enhance the capacity by only 15 per cent initially,” informed Poudel.

As per him, tender process to build storage facilities for 10,000 kilolitres of diesel in different parts of the country is currently underway. Similarly, development of a facility to store 350 kilolitres of petrol is underway in Chitwan.

With regards to ATF, NOC is developing a 200-kilolitre storage tank in Pokhara. “The detailed project report of all these storage projects have been completed and will enter tender process soon,” he said.

Meanwhile, NOC and Indian Oil Corp (IOC) are also working on developing fuel storage tanks to stock 60,000 kl of fuel in Jhapa and 100,000 kl in Chitwan.

In case of liquefied petroleum gas (LPG), Poudel informed that NOC is in the final stage of hiring a consultant for developing LPG storage in Dhanusa. Though Nepal has limited storage capacity for diesel, petrol and ATF which can meet the market demand for almost one week, it does not have any LPG storage capacity so far.

Earlier, the government had also planned to build fuel storage tanks with assistance from China and enhance the storage capacity of existing fuel depots. Moreover, NOC had already identified Khaireni of Tanahu, Battar of Nuwakot and Panchkhal of Kavre as possible sites for the development of fuel storage facilities under Chinese assistance. However, this plan has witnessed no progress.

A version of this article appears in e-paper on July 28, 2020, of The Himalayan Times.