The government jacked up the petroleum prices a few weeks ago on the grounds that the
international price of oil had shot up between the previous and the latest hike. The price had indeed gone up from US$83 to $140 per barrel. Over the most recent years, successive governments have been unable to ensure a regular and adequate supply, despite the price hikes on several occasions, but each time the government concerned, and the Nepal Oil Corporation, have claimed that the NOC still incurred a loss, though on a reduced scale as a result. The recent price increases were hefty, particularly in diesel, kerosene and petrol - around 25 per cent. However, NOC said that its then monthly loss of around Rs.2.7 billion on the trade in oil would come down to about Rs.1.5 billion after the hike. After each increase, the government and NOC have always assured the public that the supply will return to normal within days, but it never has.
The supply has rather deteriorated than previously. It is all because of the simple failure of NOC to send timely cheques of adequate amounts in payment of the oil bills to the sole supplier, the Indian Oil Corporation. If the buyer cannot pay in time, the supplier naturally reduces or stops further supply. But officials have from time to time tried to divert the public attention by citing the wrong reasons for the disrupted supply. NOC is a fully state-owned undertaking that has the sole right of import and distribution of the petroleum products in the whole of Nepal. So, it is the duty of the government to guarantee uninterrupted supply of oil, a strategic and vital commodity of daily necessity on which the economy depends so much.
Finance Minister Dr Ram Sharan Mahat has said time and again that the government can no longer subsidise the petroleum products, because this subsidy diverts resources from development and also contributes to budget deficit. But the public is not interested in this excuse - it wants easy availability of oil when it is prepared to pay the price fixed by
the government. If the government cannot afford to sell at the existing rates, it must have the courage to raise the prices further, preferably along with a fair cut in the considerable oil taxes, but it must not hold the people and the economy hostage by choking off the supply lines by not paying the oil bills in time. Commercial and private vehicles currently plying on the roads are reported to account for about one-fifth of the numbers seen when the supply is normal. What does the government want to gain by drastically cutting the oil import? Because it shrinks the amount of loss? But it also reduces the government’s sizable oil revenue. Nepali citizens are docile; they have been queuing up at the petrol-pumps for hours on each occasion as a matter of routine to get just a few litres of petrol or diesel, and often they return disappointed. This frustrating experience has lasted not just a couple of days, weeks or months, but for more than a couple of years, since before Jana Andolan II. A government so insensitive to the people’s needs and woes, as well as to the national economy, is irresponsible and incompetent.