Oil price hike in India boosts smuggling

Ravi Dahal

Birgunj, June 23:

Diesel and kerosene are increasingly being smuggled into India from bazaars in Terai area, following their price hike by the Indian government. Following the price hike in petroleum products in India, smuggling surged in border areas, Nepal Oil Corporation (NOC) complained. NOC officials expressed fear that smuggling could take an institutional form. Petrol pumps in rural areas surprisingly declared that they were out of stock, following the price increase and villagers were forced to go to district headquarters for buying petroleum products from Tuesday. Price of petrol in bordering Raxaul has shot up to Rs 49.20 (IC) paise from Rs 45. The market price of kerosene is as high as Rs 45. The open market price of diesel and kerosene are Rs 41 and Rs 34, respectively in the Indian area. With the new pricing, the price variation in diesel between the two countries has gone up from four rupees to nine rupees. Labourers and truck drivers have been indulging in smuggling even when the margin was low. Now the new pricing has given them a huge difference and smuggling is taking on the character of institutional activity, Ramesh Koirala, regional manager of the NOC told The Himalayan Times.

“Taking the benefit of open border, smugglers have been siphoning off comparatively cheap petroleum products to India using trucks, tankers, tractors, oxen carts, bicycles, motorcycles and even labourers,” he said. Although diesel in large quantities is smuggled to India by Indian trucks, the authorities concerned have not taken any step to control it. Despite the revenue mobile team of the Birgunj customs office having extended cooperation for controlling smuggling, significant success has not been achieved due to the open border, NOC stated. Price variation must immediately be adjusted with that of the Indian market for checking smuggling, concerned authorities said. Past practices show price adjustment is the only way for effectively stemming such smuggling, regional manager Koirala told The Himalayan Times. The NOC is trying to control excess supply of petroleum products in these areas, claiming that unnatural market demand could mean a spill-over to India. Past records show that as soon as price is increased in India, demand surges here, Koirala said. NOC’s regional office in Amlekhgunj has been supplying nine million litres of diesel, 2.5 million litres of petrol and seven million litres of kerosene every month. Out of the total quantity, three million litres of diesel and 3.3 million litres of kerosene are being supplied to the capital. Petroleum dealers stopped demanding more POL products from the NOC with the implementation of the new arrangement, the NOC said.