Kathmandu, June 10
The government has decided to provide around Rs.1.40 billion to the Nepal Oil Corporation (NOC) to ease the supply of fuels in the country.
A meeting of the Council of Ministers held at Singha Durbar on Sunday took the decision in this regard.
The country has faced a shortage of the petroleum products for a week as the NOC could not pay dues to the Indian Oil Corporation (IOC).
Highlighting the Cabinet’s decision, Minister for Information and Communications Raj Kishore Yadav, who is also the Spokesperson of the Government of Nepal, said the decision was taken once again to normalise the supply of fuels.
The Ministry of Finance will release the budget soon, said Yadav.
According to Suresh Kumar Agrawal, acting managing director of NOC, the supply of fuels will be eased gradually in the country.
The IOC has cut the fuel supply by almost 70 per cent since the last one week.
He said that the corporation has received around Rs. 700 million from the Citizen Investment Trust and Rs. 600 million from the Employees Provident Fund (EPF) on Sunday.
Earlier, the government had decided to provide NOC with Rs. 2.1 billion as loan assistance to ease the supply of the petroleum products. Out of the total 2.1 billion, the government would manage Rs. 1 billion from the Citizen Investment Trust and Rs. 600 million from the Employee Provident Fund.
He said that the IOC has reduced the supply of fuels to Nepal due to its increasing dues. As of May this year, the NOC had to pay IRs.2 billion to its business counterpart in India.
He said, "We will pay dues to the OC immediately after we receive amounts from the two enterprises and the government."
The accumulated loss of the NOC had Rs. 29 billion, while its loans stood at Rs.25 billion.
As per the current price structure sent by the IOC, the NOC will face a loss of about Rs. 700 million in June alone.
Currently, the corporation has been selling diesel facing a loss of Rs. 8.53 per litre gas Rs. 453.07 per cylinder. However, NOC is making a profit of Rs. 7.59 from per litre of petrol, Rs. 4.47 per litre of kerosene and 19.73 per litre of air turbine fuels.