Call to form panel to regulate fuel prices

Kathmandu, October 22:

Experts have urged the government to put in place a mechanism to fix prices of petroleum products on a par with crude prices at the international market. It may be noted that international crude prices have gone down recently.

According to the October 16 invoice forwarded to the Nepal Oil Corporation (NOC) by the Indian Oil Corporation (IOC), NOC makes a profit of Rs 18 million per month by selling 76,000 kilolitres of fuel. It may be noted that price of crude oil has fallen to $77 from the record high price of $147 per barrel in recent days.

“The consumers will get some relief if the NOC adjusts prices as per the international market. Considering the present economic recession in Europe and America, the price of crude is unlikely to rise in the near future,” said Dr Shankar Sharma, former vice-chairman, National Planning Commission.

Maintaining that institutional reforms in NOC and inclusion of private sector in the oil trade can be considered later as well, Dr Sharma emphasised the need to adjust the prices first.

Jyoti Baniya, general secretary, Consumer Rights Forum, said adjustment in prices and relief for the needy should go hand in hand.

“Consumers can be given relief even by revising hefty taxes, which the government levies on petroleum products, and minimising administrative costs of the NOC,” Baniya added.

NOC cannot go on bearing losses at the expense of the taxpayers and cannot enjoy profit at the cost of consumers, economist Prof Dr Bishwombhar Pyakurel said, adding that the oil monopoly should maintain transparency in all deals, including technical losses and pick up and delivery points for tankers.

“The government can write off some loans for NOC and it can recover some losses through institutional reforms,” he added.

Minister for Commerce and Supplies Rajendra Mahato said the NOC would reduce prices of petroleum products once it received another invoice from the IOC. “We will soon initiate the process to draft an act to govern the oil business and to provide relief to the needy,” said Mahato.

NOC spokesperson Mukunda Dhungel said NOC was waiting for a go-ahead from the NOC management committee to adjust the fuel prices.