Petroleum shortage likely to continue

Kathmandu October 30:

The Nepal Oil Corporation (NOC) today paid INR 1.5 billion to the Indian Oil Corporation for a new consignment of oil supply but the quantity of oil the money will fetch will still not meet the market demand, said Eccha Bikram Thapa, NOC’s spokesperson.

The NOC had to pay INR 2.1 billion to the IOC to ensure supply of 75,000 kiloliters of petroleum, the total estimated demand for a month, Thapa said.

Cash-strapped NOC has not been able to collect any substantial revenue from the price hike yet and the IOC is providing oil on cash basis, meaning less payment would result in less supply, he said.

Despite the price hike, NOC still has to bear a loss of Rs 80 million per month, he said.

This loss is likely to increase in November to about Rs 150 million because the oil price in the international market is skyrocketing. “Next month we will buy oil on the average price of this month. This average is extremely high as crude oil prices have soared. We will be able to benefit from the price hike only if the international price goes down,” said Thapa.

The NOC is also holding talks with the companies importing LPG, after they stopped importing fuel demanding that their margin per cylinder be raised from Rs 25 to Rs 45. Meeting their demand would mean a further loss to the NOC, he said.