Petroleum dealers make huge profits

Kathmandu, February 19:

The deregulation in pricing of petroleum products — kerosene, petrol and diesel — by Nepal Oil Corporation (NOC) has left the consumers in the cold. However, it is a boon for the dealers as they are ‘minting’ profits. The decision has given more ‘freedom’ to the private petroleum dealers to charge more.

Hari Awale, a partner of Bal Kumari Petrol Pump, a private petroleum dealer at Pulchowk Lalitpur talking to The Himalayan Times said that the price of diesel has reached Rs 54 per litre which was only Rs 46 per litre before. Similarly, he is selling petrol at Rs 68 per litre, which is more than one rupee in comparison to the price of petrol at the Sajha Yatayat’s petrol pump, owned by the government.

Om Krishna Shrestha, an official at the Sajha Yatayat pump said that they are selling per litre of petrol at Rs 67 but private dealers charge more. Shrestha also informed that the Sajha petrol pump sells diesel at Rs 53.50 per litre that is also cheaper in comparison to other private pumps.

The difference in the rates of petroleum products shows that dealers are generating more profits in comparison to what they used to before the deregulation of the petro-prices. NOC’s initiative to involve private sector in the fixation and distribution of petroleum products has hit the ‘poorest of the poor’, including the ‘lower and middle’ class, said Kumar Khatri, a taxi driver. He said that people will have hard times due to increase in the diesel prices as it directly hits the transportation of goods. The prices of the goods are certain to rise, he adds. However, taxi fare has not yet increased despite the increment of one rupee in petrol per litre, Khatri added.

Dhruv Bahadur Shrestha, secretary of the Nepal Petroleum Dealers Association (NPDA) attributed the high petroleum prices to the ‘possibility’ of hike in transportation products by 15 per cent. “While adjusting the prices in petroleum products, the issues of working loss and transportation charges are considered,” he said.

Awale of Bal Kumari Petrol Pump, Pulchowk said that they have Rs 0.86 profit margin in per litre of diesel which was Rs 0.73 per litre earlier. And the profit margin in per litre diesel is Rs 1.60 compared to earlier margin. The price of diesel per litre is the highest in 15 years that has increased the pr-ices of all necessary goods, he says.

However, some of the petrol pumps are selling petrol at Rs 68 per litre and diesel at Rs 54 per litre, more than the price of the government dealers. Some of the pumps even do not have transparent system in making their ‘stock’ public, which is a direct violation of the NOC’s directives.