Face-To-Face
Nepal's partnership with India is a standout success in a world where geopolitical tensions often disrupt essential services. The Motihari-Amlekhgunj oil pipeline-South Asia's first cross-border petroleum project-has revolutionized Nepal's energy security and economic stability. The Himalayan Times (THT) sat down with Chandika Prasad Bhatta, Managing Director of Nepal Oil Corporation (NOC), whose extensive experience in energy strategy and infrastructure development has positioned him as a key thought leader in the sector. With a track record of implementing large-scale, high-impact projects, Bhatta sheds light on how this pipeline is a game-changer for Nepal and what it signals for future cross-border energy collaborations.
THT: How has the ₹200 crore annual savings from the pipeline influenced Nepal's economy and public services?
Bhatta: The savings have had a ripple effect across the economy. For consumers, fuel prices dropped by two rupees per litre, which may sound minor, but it isn't when considering transport costs. Cheaper fuel means lower costs for goods, enhanced industrial productivity, and more substantial domestic industries. When our industries thrive, we reduce our reliance on imports, preserving foreign currency reserves. These changes pave the way for more jobs and economic growth. It's a cycle of benefits-lower fuel prices trigger reduced transport costs, ultimately making essential goods more affordable for ordinary citizens while promoting small business growth. The pipeline, therefore, is not just saving money; it's an engine of national development.
THT: What broader effects have come from this fuel price reduction?
Bhatta: Lower transport costs are boosting both industry and commerce. If petrol costs ₹165 per litre instead of ₹167, imagine that across thousands of litres consumed daily. Companies save on logistics, prices in the market stabilize, and consumers benefit. Industries are producing more competitively, leading to job creation and import substitution. In short, reduced fuel costs accelerate a self-sustaining economic cycle. Beyond cost savings, we're seeing improved competitiveness for domestic producers, who now have more breathing space to expand, innovate, and invest locally. This is critical for Nepal as we work to strengthen our manufacturing base and reduce dependency on imports.
THT: How has the pipeline strengthened Nepal's energy security, particularly during past disruptions like blockades?
Bhatta: A few years ago, fuel scarcity was a grim reality. Queues stretched for kilometres, and gas stations often ran dry. Today, thanks to the pipeline, such shortages are history. We can now move 300,000 litres of petrol simultaneously, ensuring reliable supplies for consumers and industries. Before the pipeline, trucks took days to deliver fuel to remote regions. We've cut those delays drastically, providing stability even in times of rising demand. With secure supply lines in place, businesses no longer face operational slowdowns due to fuel shortages, and citizens don't live in fear of long queues or black markets. The pipeline is a safety net that has helped us avoid crises like the ones we experienced in 2015.
THT: With fuel demand rising, how will the expanded pipeline handle future growth?
Bhatta: Fuel consumption is increasing, though not as sharply as before, due to electric vehicle imports. However, pipelines offer the capacity to store massive reserves. We're constructing storage facilities across Chitwan, Jhapa, and Amlekhgunj with the help of the Indian Oil Corporation (IOC). Once these are operational, Nepal will have a robust buffer to meet its growing needs. By enhancing storage, we're also reducing the risk of future disruptions. With reserves of up to 91,000 kilolitres in key regions, we'll be prepared for emergencies and peak demand periods, giving us room to balance growth sustainably and plan to diversify our energy sources.
THT: How has the pipeline reduced fuel pilferage and adulteration?
Bhatta: Before the pipeline, manipulation during road transport was standard-fuel theft, traffic congestion, and road damage added hidden costs. The pipeline has eliminated these problems, delivering clean fuel without pilferage. Kerosene was once mixed with diesel to cheat the system, but that's now under control. We're even implementing tracking devices on fuel tankers for added security. The economic impact of this is vast-we've reduced revenue loss, cut repair costs for roads damaged by heavy fuel trucks, and improved consumer confidence by ensuring fuel quality. It's a win-win for both the government and end users.
THT: How is the project strengthening Nepal-India ties and encouraging further investments?
Bhatta: We've traded fuel with India for over five decades, but this project represents a new level of cooperation. The relationship between NOC and IOC is exemplary-built on trust, mutual profit, and streamlined pricing systems. This collaboration has political, economic, and social benefits for both nations, showing how regional partnerships can succeed with shared vision and effort. More importantly, this success story invites more collaborative infrastructure projects. India is not just a supplier but a key development partner, making strategic investments that benefit both sides and set the stage for further regional integration.
THT: What enabled the project's completion in just 15 months-half the expected time?
Bhatta: It's a testament to teamwork. Local governments, communities, and authorities pitched in, whether for environmental clearances or infrastructure. Continuous coordination eliminated bottlenecks. We'll apply these lessons to upcoming projects like the Amlekhgunj-Chitwan and Siliguri-Jhapa pipelines. We aim to complete them in 36 months, well ahead of schedule. When communities feel they have a stake in the outcome, projects move faster and more smoothly. This pipeline has proven that large-scale cross-border infrastructure projects can be delivered on time when local support and effective coordination come together.
THT: How does this project align with Nepal's long-term energy and infrastructure goals?
Bhatta: Petroleum products remain crucial for areas beyond the reach of the national power grid. They fuel key projects-hydropower, agriculture, mining, and even cable car construction. The pipeline accelerates infrastructure development in remote regions by ensuring stable supplies and supporting national energy security. For now, petroleum products are indispensable in significant development sectors. While we aim to diversify into renewable energy long-term, a stable petroleum supply is helping us build the infrastructure needed for that transition.
THT: What challenges did you face, and how were they resolved?
Bhatta: Convincing private landowners was tough at first. There were fears about explosions and land productivity. We assured them that the pipeline runs deep underground, posing no threat. Our control systems detect and address any issues instantly, easing their concerns. The trust we've built will help with future projects. This project taught us that transparent communication with stakeholders is key to resolving concerns quickly. We can now use this approach to mitigate risks and resistance in future infrastructure projects.
THT: What technical expertise has IOC transferred to NOC, and how has this boosted local capacity?
Bhatta: This project was the first in South Asia. Initially, there were doubts about safety and feasibility. Today, our teams have mastered the technology-monitoring operations, ensuring safety, and managing the pipeline independently. This knowledge transfer has also created job opportunities, enhancing Nepal's technical capabilities. The expertise gained is not just confined to pipeline management; it has also strengthened our maintenance, crisis response, and project management capabilities, positioning Nepal as a regional player in energy infrastructure.
THT: How can this success pave the way for future cross-border collaborations?
Bhatta: Experience is the best teacher. Our work on this project has set precedents for future agreements with India. We've streamlined processes-technical operations, negotiations, and local coordination. Thanks to this foundation, we're confident in executing new projects with minimal hurdles. Strong bilateral cooperation remains key to our progress. This project has shown that when there's mutual trust and effective execution, even complex cross-border projects can succeed. We're now better equipped to tackle more ambitious initiatives, like energy diversification and broader regional connectivity.
