In the last two months of the crisis, only three meetings of the NOC board were held

Kathmandu, November 29

At a time when the country has been facing a crippling shortage of fuel due to Tarai blockade which has choked import of petroleum products since the last two months, the government has not been putting in a serious effort to import fuel through alternative sources to ease people’s lives.

Almost a month after the memorandum of understanding was signed with Chinese government undertaking — China National United Oil Corporation (PetroChina) — the Ministry of Commerce and Supplies sent a letter to the Ministry of Finance on Friday requesting it to write to the government of China through the Ministry of Foreign Affairs to waive duty on petroleum exports to Nepal.

After the framework deal with PetroChina was signed on October 28, people had expected the MoCS and Nepal Oil Corporation to work on a war footing to ease the crisis, however, things have not been moving ahead as expected.

“We have received a letter from MoCS and are preparing to write to the government of China to waive duties on petroleum exports to Nepal,” said Rajan Khanal, revenue secretary of MoF. However, the letter that MoF received has not clearly mentioned what sort of duties the Chinese government will levy on fuel exports. A team comprising officials of MoCS, MoF and NOC, among others, had finalised the framework deal with PetroChina after the government decided to import one-third of the current consumption volume of petroleum products from China. However, the NOC board chaired by the commerce secretary had not discussed the issues concerning fuel import from China during board meetings.

“In the last two months of the crisis, only three meetings of the NOC board, chaired by commerce secretary, were held and they were focused on monitoring and distribution of petroleum products rather than on expediting the business-to-business (B2B) deal with PetroChina,” a high-level source at MoCS told The Himalayan Times, requesting anonymity.

The issue of Chinese government levying duties on fuel exports to Nepal came to the fore when the government delegation led by Joint Secretary of MoCS Shambhu Prasad Ghimire and comprising officials from finance ministry, law ministry, foreign ministry, NOC and Nepal Bureau of Standards and Metrology was ready to leave for Beijing to seal B2B deal with PetroChina. The visit was cancelled at the last moment when the Nepali Embassy in Beijing informed the government about the duties to be levied by China on export of fuel.

To sort the issue of taxation and other related matters, the government needs to send a high-level team because NOC staff are just employees of the government-owned company and they do not have the mandate to discuss issues related to taxation. Despite these developments, NOC unilaterally sent a two-member team of Acting Deputy Managing Director Sushil Bhattarai and Acting Director Deepak Baral to Beijing to talk on technical matters of fuel import with PetroChina last week.

NOC Spokesperson Mukunda Ghimire today informed that NOC was not aware of what the team was doing in Beijing and when they would return.

The two-member team was sent by Managing Director of NOC Gopal Bahadur Khadka. Khadka, a political appointee of the earlier government, was summoned by MoCS on Friday. MoCS has sought clarification from Khadka regarding NOC’s deal with a privately owned company Birat Petroleum and dispatching fuel tankers to fuel pumps and industries of his favour on his own discretion breaching the rules.

Khadka had signed a contract with Birat to purchase petrol and diesel at a rate that was almost double the existing market price and had released payment to the latter to import fuel. Birat scrapped the contract with NOC on November 8 after the oversight agencies began a probe. Khadka was told to submit his clarification within three days on Friday.