NOC’s low storage capacity partly blamed for fuel crisis

Kathmandu, October 9

The fuel stock of the country will completely dry out in three days if Nepal Oil Corporation (NOC) were to sell remaining petroleum products as in normal days.

As of today, NOC’s fuel stock, including petrol, diesel, kerosene and aviation turbine fuel (ATF), had depleted to 11.14 million litres, shows NOC’s website.

Considering daily fuel consumption of around four million litres, this stock will last for only 2.78 days if NOC sells petroleum products as in normal days.

State-owned NOC’s oil stock has fallen to a critical level because of disruption in supply caused by protests in the Tarai and sudden drop in number of tankers ferrying petroleum products from India, the sole fuel supplier for Nepal.

NOC has been facing disruption in fuel supply since the protests in the Tarai began 58 days ago. However, situation became critical around two weeks ago after very few petroleum tankers started entering the country from Indian border points.

For instance, Nepal received only 312,000 litres of petrol, 888,000 litres of diesel and 12,000 litres of kerosene on Thursday, which is only about a fourth of the normal daily requirement. These petroleum products entered Nepal from only two border points in Biratnagar and Nepalgunj.

Although many are now blaming Tarai protests and disruption in supply from India for shortage of fuel in the country, Revenue Secretary Rajan Khanal said the government should also take the responsibility for not being farsighted.

“We are now facing this problem because we never focused on expanding our petroleum storage capacity,” Revenue Secretary Khanal said. “We always considered the storage tanks of private fuel stations as our national reservoir.”

NOC has storage capacity for 62.94 million litres of petroleum products across the country. But this storage capacity can cater to country’s petroleum demand for only around 16 days.

“The government should, therefore, immediately expand storage capacity of NOC so that there is adequate stock of fuel for six to seven months,” Khanal said.

NOC has not expanded its storage capacity for almost two-and-a-half decades.

“But in all these years, consumption has gone up by over 300 times,” said Lilendra Prasad Pradhan, president of Nepal Petroleum Dealers National Association. “So, it is essential that the government expedite the process of expanding storage capacity so that Nepalis do not face the same problem when fuel crisis hits the country next time.”

Also, focus should be given to construction of the 41-km Raxaul-Amlekhgunj petroleum pipeline, a high-ranking official of the Ministry of Commerce and Supplies said.

NOC and Indian Oil Corporation had signed a pact for construction of pipeline in August. “Had we built that pipeline, protests in Tarai probably wouldn’t have affected supplies from the Indian side,” the official said.