NOC’s plan to expand fuel storage facility in limbo

Kathmandu, December 28

Following the acute shortage of fuel in the domestic market three years back 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.

Moreover, the state-owned Nepal Oil Corporation (NOC) had begun the land acquisition process for the project and expressed its commitment to complete the project within 2020.

However, the project has been completely halted ever since the then managing director of NOC was sacked from his post on charge of financial irregularities in the land acquisition process for the project. Due to lack of leadership at NOC since two years and the ongoing probe in this issue by the Commission for the Investigation of Abuse of Authority (CIAA), the project today is not under due priority of the corporation and the government.

“Expansion of fuel storage capacity is the need for the country and this plan has to be materialised at any cost. However, it is true that the project has not moved ahead due to various reasons including different probes into the issue and lack of leadership at NOC,” said Birendra Goit, spokesperson for NOC.

Considering the increasing demand of petroleum products in the Capital and supply obstruction at times, NOC had planned to develop a storage facility with capacity to stock around 70,000 kilolitres of fuel in the Valley alone. It has already purchased necessary land meant for the project across the country.

Meanwhile, Goit informed that the fuel storage project will be expedited once NOC gets a new leadership. The Ministry of Industry, Commerce and Supplies has already started the process to hire a managing director for NOC.

The government has also not been able to realise its plan to build fuel storage tanks with assistance from China and enhance the storage capacity of existing fuel depots. Due to limited resources and technical knowledge, the government had earlier sought Chinese technical and financial assistance for the construction of fuel storage facilities. Though the Chinese government had been positive towards assisting Nepal in developing fuel storage facilities, the two countries are yet to sign a concrete deal on this project.

NOC has 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.