Kathmandu, Apr. 26
The supply of the petroleum products in Nepal could improve, to some extent, even for a short period, as the Ministry of Finance has provided the Nepal Oil Corporation (NOC) with Rs. 750 million under the Value Added Tax (VAT) refund facility.
"This fund will help us in improving the present supply of fuels. We are in the process of sending the money to the Indian Oil Corporation (IOC) for paying dues," said Sushil Bhattarai, deputy director at NOC.
Even after paying Rs. 750 million to IOC, NOC will have to pay an outstanding due of about Rs. 1.5 billion.
Lal Mani Joshi, Secretary at the Ministry of Commerce and Supplies (MoCS), however, said that the shortage of fuels will not be resolved for long-term unless the government adopts an auto-pricing mechanism and write off revenues on petroleum products.
He said that the government needed to come up with a clear policy on the fuel supply. "The government should either provide continued assistance or adopt the auto-pricing mechanism for easing the fuel supply for long-term," he said.
He said that his ministry has repeated asked the Finance Ministry to provide Rs. 2 billion to resolve the current fuel crisis.
"Despite its positive response, the Ministry of Finance has yet to allocate the amounts," he said.
Bhattarai said that the corporation has paid due attention towards easing the supply of fuels even by taking loans and facing a heavy loss.
The corporation has to pay Rs.150 million monthly as an interest of Rs.23 billion loan. The corporation suffers a loss of Rs. 1.56 billion per month.
Regarding the present fuel shortage, he said, "We have curbed the supply of fuels in the country because of NOC’s failure to pay dues to IOC. But the current market rumour that the fuel shortage is getting worse has created such a crisis," he said.
IOC has reduced the supply of fuels to NOC by about 30 per cent.
The total stock of fuels of the corporation has gone down to 13,000 KL from 23,000 KL. So, we are not in a position to distribute fuels from this stock, he said.