Kathmandu, January 3

Lawmakers have urged the government to remove the additional taxes that are being levied on the sale of petroleum products citing that it has only added a burden on consumers while the actual purpose of collecting such taxes has not been fulfilled.

The government has been collecting additional taxes on petroleum products under different headings like development of petroleum infrastructure, pollution control, road maintenance, stabilising fuel price, among others. Nepal Oil Corporation (NOC) has been imposing additional burden of 50 paisa per litre as infrastructure tax on the sale of petrol, diesel and aviation fuel for development of NOC’s own infrastructure and five rupees a litre for the development of Budhigandaki Hydroelectricity Project. Similarly, NOC has also been collecting 50 paisa per litre on petroleum products as pollution tax.

Lawmakers said that the government has collected a huge amount of money under these headings but has not utilised the fund for their actual purpose.

“There is no point in imposing additional taxes on the price of petroleum products if the government cannot spend the collected fund to fulfil the purpose of its collection. Nepali roads are still in awful condition, pollution problem is the same and consumers have time and again been victims of high petroleum price,” said lawmaker Rajya Laxmi Shrestha while addressing a meeting of the sub-committee of Committee on Commerce, Industries and Consumer Welfare Relations today.

As per NOC’s statistics, government has collected almost Rs two billion as pollution tax and Rs 7.3 billion under road maintenance tax from the sale of petroleum products in the last three years alone, which has remained unutilised in the government treasury. Similarly, the government has collected Rs 3.3 billion in NOC’s Price Stability Fund which has not been utilised to control price hike of petroleum products.

Lawmakers also criticised Ministry of Supplies (MoS) and NOC for bypassing the committee’s direction and not reducing price of petroleum products in the name of maintaining price uniformity in southern border areas to control smuggling of petroleum products.

“It is not the responsibility of MoS and NOC to control smuggling of petroleum products if it is happening in southern border areas. We have other state mechanisms to control it,” said Mahindra Sherchan, another lawmaker, adding NOC and MoS cannot increase price of petroleum products merely because price of petroleum products are cheaper in Nepal. Criticising NOC for not adjusting fuel price scientifically, Sherchan said, “The current price hike in petroleum products is akin to NOC and MoS cheating consumers.”

A few days back, MoS had submitted a written clarification to the sub-committee on reasons behind recent hike in price of petroleum products. In the clarification, MoS had said that the price was hiked following a direction from the Ministry of Finance to maintain uniformity in price of petroleum products in the southern border areas.