For more than a couple of years, the petroleum products have been in short supply in the Kathmandu Valley and the rest of the country, and there have been daily sights of queues at the petrol pumps. The prices have been raised more than once since then, and the last increase in the prices of kerosene and diesel before the election to the Constituent Assembly had to be rolled back within forty-eight hours amid widespread public protests because of its timing, the government’s failure to take the public into confidence, and the sharp upward change in kerosene price to make it equal to that of diesel irrespective of cost. When the last effective increase took place, the world price of crude oil stood at $83 per barrel, but it is now hovering at around $128. There is therefore no doubt that the purchase price of oil for the Nepal Oil Corporation (NOC), the only distributor for Nepal, has gone up considerably.
But the post-Jana Andolan governments have proved incompetent at handling the crisis. Most of the time, the scarcity has been due to the failure of the NOC to pay its oil bills. The government has not been able to hike the prices, reduce the taxes on the petro-products that are high, take visible cost-cutting measures to assure the public that it does not intend to pass on the burden of its inefficiency and waste to the consumers, or even make everything transparent. Sadly, members of the public were even denied a copy of the NOC’s contract with its sole oil supplier, leading them to file a PIL case. The government’s duty is to take prompt action to end the crisis in such a way that the impact on the consumers is minimal as far as practically possible, oil made easily available, and its distribution financially sustainable. Never has the country seen such a prolonged period of acute shortages and long queues at the petrol pumps.
In this context, Finance Minister Dr Ram Sharan Mahat’s remarks on May 18 that the government was going neither to hike the oil price nor to lend to the NOC (to meet its debts) display the government’s lack of sensitivity to its public responsibility. At the same time, he sees the necessity of increasing the oil price immediately. He, however, said that the current government has no plans to take decisions having ‘long-term impact’. A few days ago, the NOC had asked the government to grant it a loan of Rs.2 billion, or increase the price. The government’s subsequent decision to lend Rs.800 million will only meet part of the NOC bills that now stand at Rs.2.5 billion; and it is reported to be incurring a monthly loss of Rs1.67 billion. That means severe oil shortages will continue at least for some more time. NOC’s latest attempt to introduce dual pricing for diesel — one for those in line and the other for those who want to get it easily — has proved unsuccessful. The ‘long-term’ argument is understandable. But government action to relieve the crisis is even more important. Either the government must make the loan available to the NOC or make some provisional price adjustment for that purpose till a new government takes power. Playing the role of a spectator would reflect poorly on the present government leaders.