Kathmandu, May 3
The Ministry of Commerce and Supplies (MoCS) has started lobbying for reviewing the provision of Value Added Tax (VAT) being charged on petroleum products in order to improve the supply of fuels across the country.
Minister for Commerce and Supplies Lekhraj Bhatta said that the ministry has taken the initiative to get the policies and programmes related to the transaction of the petroleum products implemented through formulating laws.
“The ministry has completed the procedures regarding the formulation the laws. A Bill concerning this will be submitted to the parliament in its next session,” said Minister Bhatta.
He was speaking at a meeting organized to review the various activities carried out under his ministry.
Regarding the distribution of cooking gas card system, he said that the ministry has started the process of its implementation. “Household consumers will benefit from this new provision, as they will get the fuel at subsidized rates” he said.
He asked the government would review the taxes on fuels in order to resolve their frequent shortages.
He informed that the ministry was implementing the 32 various programmes for the promotion of trade and commerce and 44 activities for improving the supply sector as per the ‘Whitepaper-2068.’
He said that the import of the petroleum products has been increasing significantly. “This has contributed to widening the country’s foreign trade deficit,” he said.
He said as the government had decided to allow the private sector for supplying the petroleum products, the latter would start importing and selling the essential fuels in future.
Talking about the critical situation of the fuel supply, he asked the government to provide the NOC with subsidies or reduce taxes in order to offer relief to consumers.
He, however, said that the country has seen a scarcity of cooking gas despite a regular supply of the cooking gas.
He conceded that the corporation had failed to supply fuels as per the demand due to the lack of sufficient capital.
“Since the Finance Minister has pledged to offer a loan of Rs. 3 billion to NOC, the supply of fuels will be smooth,” he said.
Saying that the NCO would not supply of fuel by taking loans in long-term, he said that there was no alternate to opting for an auto-pricing mechanism as per the international market.
As per new signed an agreement between the IOC and NOC, the former has agreed to slash 2.5 per cent as the Price Adjustment Factor (PAF). The NOC expects a surplus of Rs. 190 million monthly from the new provision that writes off the PAF.
The two institutions have also reached an understanding to add the Mumbai Port for supplying the petroleum products in the western part of Nepal. With an enforcement of this provision, the cost price of fuels will be reduced in the mid and far-western regions.
Earlier, the IOC was supplying fuels from the Haldiya Port alone.