Smuggling of fuels cannot be stopped unless the government and NOC adjust prices of imported petroleum products in line with prices in bordering Indian states

The state-owned petroleum monopoly – Nepal Oil Corporation – has now started facing the problem of smuggling of petroleum products as their prices in Nepal are cheaper than in the Indian states bordering Nepal. This has become a headache for the state fuel monopoly after the government barred it from adopting the automatic price adjustment mechanism introduced in September 2014 after much homework. NOC officials have said that a large quantity of petroleum products imported from India with foreign currency have flowed to bordering Indian states owing to the cheaper prices in Nepal. Such a situation, if not controlled immediately, could pose serious problems for the NOC to maintain smooth supply in domestic markets where consumption of fossil fuels has surged remarkably compared to the previous years. They have said that the recent demand for fuels in the country is directly linked with the price differences between Nepal and Indian states bordering Nepal. It is because the Indian cargo trucks that bring goods to Nepal fill their tanks full while going back to India as prices of fuels in Nepal is cheaper compared to that in India.

While a litre of petrol and diesel cost Rs. 98 and Rs. 73, respectively, in Nepal a litre of petrol and diesel in India cost Rs. 117 and Rs. 99, respectively, in Bihar. Fuel price in India is comparatively higher than that in Nepal as the Indian government imposes excise duty on fossil fuels, but such taxes are not imposed in Nepal. This is the reason why petroleum products are cheaper in Nepal than in India. Another reason for not being able to maintain an effective supply of fuels is the ongoing parliamentary and provincial elections taking place this month during which movements of people have suddenly gone up. The NOC imported 120,000 kilolitres of petrol in November as compared to 83,000 kilolitres of petrol in August. It shows  increased import of fuel during election time.

NOC officials have suggested that one of the ways to control fuel smuggling is to limit the Nepal-bound Indian trucks from filling excessive fuel while returning to India. But it is very difficult to monitor all petrol stations in Nepal from where the Indian trucks fill the fuel. Another way, as suggested by the NOC officials, is to control the fuel smuggling by adjusting fuel price across the borders. But there must be a government-to-government level negotiation if the NOC wants to go for the second option. This problem would not have emerged had the government allowed the NOC to adjust pricing of petroleum products as per the international market. The NOC had been following the automatic price adjustment mechanism well before the announcement of the parliamentary elections. It, however, had to suspend the automatic fuel pricing as the government intervened in its decision. The automatic pricing mechanism had helped the NOC earn profit and pay back the loan of Rs. 36 billion it took from various financial institutions and the government. Smuggling of fuels cannot be stopped unless the government and the NOC adjust prices of imported petroleum products in line with the prices in bordering Indian states.

Health challenge

HIV/AIDS is one of the most significant public health challenges which knows no boundaries. More people infected with deadly virus are receiving free antiretroviral (ART) drugs. The number of people with HIV seeking treatment number 19,388 people in Nepal. This is an increase in the number of patients receiving this service which was 16,449 people in 2016. ART services are available from 68 centers set up by the government and more patients are receiving such treatment. Among the patients receiving ART and therapy 75 percent of them are receiving the treatment. A matter of concern is that 11 per cent of them have stopped taking the medicines and 11 percent of the patients had died from the disease.

HIV/AIDS is found more in the capital as many people living with HIV have migrated here from different parts of the country. More unsafe sex is being practiced and the use of injectable drugs is on the rise. The National Center for AIDS and STD control has established 111 community care centers where patients are provided with ART services. Patients with HIV should be encouraged to take medicines as it can prevent untimely deaths.