Kathmandu, May 14:

Due to Nepal Oil Corporation’s (NOC) failure to pay customs duty, about 84 tankers carrying 900 metric tonnes of liquefied petroleum gas (LPG) have been stranded at Nepal-India border for last couple of days, resulting in fast decrease in stock of cooking gas in the Kathmandu valley.

As a result, supply of LPG in the valley has been disrupted and traders are finding it hard to meet the ever increasing demand. Although the supply of other petroleum products such as diesel and petrol has improved after three weeks of disruption, LPG supply has still remained sluggish for last three weeks.

“The current supply of LPG is not enough to meet daily needs, and the demand has been going up tremendously,” says Sawar Lal Agrawal, vice-president of LPG Industry Association. According to him, NOC’s poor financial health has caused delay in imports of the cooking gas from India.

An already financially distressed NOC’s outstanding dues to Indian Oil Corporation (IOC) has reached Rs 5.76 billion as of May 1, while its monthly accumulated losses have crossed over Rs 580 million. With such a gloomy financial status, the state-owned petroleum import monopoly is not even at position to pay daily customs duty of about Rs 20 million to Birgunj customs, which has also affected the supply. Officials at the NOC said that the supply was partially disrupted due to closure of the nearest IOC refinery at Barauni for about a month, for a regular maintenance. NOC has been procuring petroleum products from Haldia and Mathura refineries, which is a bit costlier because of additional transportation cost.

According to the NOC official, 300 metric tonnes of LPG would be released today out of 900 metric tonnes that have been stranded at Raxaul. “Our stock is decreasing rapidly whereas supply has been almost nil for last couple of days,” says Bibendra Pradhananga, president of LPG Traders Association. He further added that the traders are hardly meeting a daily demand of 20,000 cylinders in the Kathmandu valley.

“We even don’t know why the supply has been disrupted. When contacted the NOC officials, they refused to clarify the reason behind the short supply,” said Pradhananga.

Nepal consumes about 85,000 metric tonnes LPG every month, whereas the demand of Kathmandu valley alone constitutes about 75 per cent of total supply.