Nepal | May 25, 2020

NOC too secretive for a public company

The corporation has stopped sharing its profit-loss details since it started making gains

Sujan Dhungana
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Kathmandu, August 23

The state-owned Nepal Oil Corporation, which used to publish its fortnightly and monthly profit-loss details when it was going through economic hardship, has not been publicising such information since it started booking huge profits a few months ago.

Apart from removing details of NOC’s financial health on its website, NOC staffers have become stingy while sharing information ‘officially’, though earlier they used to provide details without any prodding. Nowadays they urge you to contact NOC’s leadership on the matter.

Appointment of Surendra Poudel, credited with bailing out debt-ridden Udaypur Cement, as the executive director of
NOC in January was considered a positive step. However, he has recently come under fire for controlling the flow of information from NOC and not reducing fuel prices in line with falling crude oil price and increasing NOC profits.

“NOC is a public company. We had been making public our monthly profit-loss details in the past when the corporation was struggling financially. Making public such financial details of a public firm is also necessary to ensure transparency,” said an official at NOC seeking anonymity.

“However, the current leadership at NOC has barred information flow as NOC has been making good profit. This might generate negative sentiment among the public towards NOC.”

NOC’s Executive Director Poudel could not be reached despite THT’s repeated attempts.

Once a debt-ridden entity, NOC has been making profit on all fuel products — petrol, diesel, kerosene and liquefied petroleum gas. According to an NOC official, NOC’s monthly profit stands at more than Rs 2 billion. Earlier, it used to incur huge losses on LPG, but the corporation is making a profit of Rs 100 per cylinder these days.

NOC was struggling financially till 2014 owing to significant rise in international crude oil price. Back then, NOC had borrowed almost Rs 35 billion from the government and different financial institutions. However, NOC started booking
profit in the beginning of 2015 after crude oil price started falling. It was able to clear all its dues by the end of 2016. But even after booking profit NOC didn’t reduce fuel prices in the domestic market.

In a sense, NOC seems to be driven by commercial motives instead of public service. The government has adopted auto-pricing mechanism in fuel, which requires NOC to revise fuel prices every fortnight based on the fuel prices of Indian Oil Corporation. However, NOC has been revising fuel prices sporadically as per its convenience.

Meanwhile, consumer rights activists said NOC had become one of the most corrupt and anti-public public firms. “By not adjusting fuel prices scientifically it is promoting corruption. NOC is also not using funds collected from the public for the betterment of public properly,” informed Madhav Timalsina, president of Consumer Rights Investigation Forum.

A version of this article appears in print on August 24, 2019 of The Himalayan Times.

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