One of the major reasons behind the financial losses the NOC has been facing is its lack of transparency
The government had decided to adopt an automatic pricing system for petrol, diesel, kerosene and aviation fuel in October 2014. As per the decision, the price of the fossil fuels would have to be adjusted as per the price fluctuation in the international market and the price list sent by the Indian Oil Corporation (IOC), the sole supplier of petroleum products to Nepal. The IOC sends its price list to Nepal Oil Corporation (NOC) twice a month. However, the NOC has not followed the automatic pricing system introduced by the government itself, citing huge losses and outstanding dues to the IOC. Consumers have not benefitted from this system as NOC hikes prices of the fossil fuels when it receives an increased price list, but refuses to reduce their prices when it receives a decreased price list. As a result, oil prices in the domestic market continue to remain high despite their fall in the international market. Prices of the fossil fuel have gone up in the international market due to the ongoing war between Ukraine and Russia since February 24. At the same time, the OPEC+ countries, which determine the price of the petroleum products, have refused to pump more crude oil despite calls by the international community.
Even though the NOC has not slashed the price of petroleum products in the domestic market, it still owes Rs 33.60 billion to the IOC for fuel purchase. As per the revised list of fuel prices sent by the IOC on October 16, the NOC is headed to make a profit of Rs 390 million in the second half of the month.
But NOC officials said it was incurring heavy losses in diesel and LPG while making some profit through the sale of petrol and aviation fuels. The consumption of diesel is consumption of diesel is around twice that of petrol in the country. The estimated loss in diesel sales amounts to Rs 180.51 million and Rs 370.60 million in LPG sales in the second half of October. Therefore, the NOC has taken loans from various financial institutions for its operations.
When the price of diesel goes up, it is the transport sector which suffers the most, further increasing prices of commodities and services.
One of the major reasons behind the financial losses the NOC has been facing is its lack of transparency.
Despite facing financial losses, NOC has been distributing bonus to its employees and doling out petrol to high-profile people for free. The persons who are appointed by the government to the NOC leadership are always picked not on merit basis, but on the self-interest of those in power. There are also rumours that the government is deliberately pushing the NOC to the brink of liquidation so that the private sector could enter the business of petroleum products.
It will be yet another disaster for the country's fuel sector should the private sector have control.
The concerned ministry must be able to plug in the loopholes seen in the NOC to make it a self-sustaining entity. The consumers at least would get some sort of respite if the NOC sincerely follows the automatic pricing system, which was introduced after extensive deliberations among the major stakeholders.
It is also the duty of the government to protect the rights of the consumers. Those who have professional integrity should be appointed to a sensitive public enterprise like the NOC.
Graft in land deal
The Commission for the Investigation of Abuse of Authority (CIAA) has filed a chargesheet at the Special Court against 37 persons for allegedly embezzling public property in Mahendranagar. They are said to have transferred or received land plots belonging to then Mahendranagar-2 Development Committee without the decision of the Board of Directors.
In the chargesheet, the anti-graft body has demanded punishment against the defendants and forfeiture of the land plots from the current landowners.
This act of corruption should, however, not surprise anyone as this is how government land is being usurped by unscrupulous people across the country.
In the above case, ex-officials of the committee, Kanchanpur District Land Revenue Office, survey office and those who managed to get the land registered in their names are involved. This must be how large tracts of public land have disappeared to make way for private housing in Kathmandu and other urban centres. And this could not have happened without collusion with the powers that be and the political parties. What we need is a resolute leader like Balen Shah, the newly-elected young mayor of Kathmandu, to seize all stolen public land in the country.
A version of this article appears in the print on October 21, 2022 of The Himalayan Times.
