Kathmandu, May 31:

After two weeks of uncertainty, the Nepal Oil Corporation (NOC) has made a partial payment of one billion rupees (IC 624.7 million) to the Indian Oil Corporation (IOC) to bring down its outstanding dues to about six billion rupees.

The state-run ailing petroleum supply monopolist, NOC made the payment to the sole supplier of fuel after the ministry of finance released the said amount today. The payment came at a time of acute petroleum supply crisis with NOC facing an all-time low level of stock. NOC stock is reported to be just enough to meet demand for two more days.

Ichha Bikram Thapa, spokesperson of NOC, confirmed that the corporation today cleared IOC dues for the months of April and May and made advance payment of Rs 240 million each for June and July, as per the bilateral agreement of paying additional Rs 240 million each month to settle the previous outstanding.

According to Thapa, NOC today deposited the amount at the IOC’s account with the Standard Chartered Bank. “With this payment, petroleum supply is expected to become normal to some extent,” he said. He, however, said that this is not a permanent solution, as NOC is still incurring a loss of over Rs 254.8 million every month.

Last week NOC had also disclosed that IOC has tightened the supply of petroleum products following its failure to clear the outstanding dues as well as monthly import bills for the last two months. Earlier, NOC had committed to paying an additional Rs 240 million every month along with monthly import bills to settle past dues.

As of mid-May, the NOC’s total liabilities have crossed Rs 10 billion, the largest chunk being with IOC which accounts for Rs 5.955 billion and Rs 4.44 billion for domestic financial firms.

Last week, the corporation also stated that the government is now left with two options, either to provide Rs 500 million support to NOC to ensure regular supply or immediately adjust petroleum prices.

According to figures, NOC is incurring monthly losses of Rs 55.7 million on petrol, Rs 120.5 million on diesel, Rs 144.3 million on LP Gas and Rs 47 million on kerosene. The only profit making product is air turbine fuel that stands at Rs 112.8 million a month.