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VOL. 27, NO. 38, June 06 , 2008 (Jestha 24 2065 B.S.)
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Slippery Course
The state-owned NOC has issued another warning of imminent disaster in fuel supply
By A CORRESPONDENT
Despite the grave nature of fuel shortage, the government – busy in its own political agenda – has only applied cosmetic measures to avert the crisis.
Last week, when the state-owned and bankrupt Nepal Oil Corporation (NOC) issued an SOS call saying it was totally unable to supply fuel without government subsidy, the government responded by throwing Rs 800 million at it.
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Oil stock : Receding |
But that measure could not even help for a week. The NOC has once again warned that the crisis is going to deteriorate as its monthly losses have soared to whopping Rs 2.7 billion a month.
Dragged by the record-shattering rise of petroleum products in the international market – which has doubled to $ 130 per barrel of crude oil in last one year – the NOC is financially bleeding as it has not been allowed to adjust the domestic price.
The NOC has informed that based on new import prices from its sole supplier Indian Oil Corporation (IOC), its monthly losses have increased to Rs 2.7 billion from Rs 1.78 billion a month ago.
“Rising prices of crude oil and recent appreciation of US dollar have pushed the petroleum prices significantly up, pushing NOC’s monthly losses to a record high,” said Digambher Jha, managing director of NOC, told The Himalayan Times daily.
As per the latest import prices of June 1, NOC said its losses on petrol and diesel stood at Rs 19.67 and Rs 43.73 per liter, respectively. It incurs a loss of Rs 36.07 a liter on kerosene and Rs 379.98 in a cylinder of cooking gas. “For the first time, NOC is incurring losses on sales of air turbine fuel (ATF), too,” Jha said, adding that the monthly loss on ATF has been calculated to be Rs 2.5 million.
Last month, the NOC had earned profit of Rs 96.3 million on sales of aviation fuel. The NOC has informed the ministry about new prices and its inability to ensure smooth supply of petroleum products, Jha said.
“We are left with no option. Either the government should inject more money to buy petro-products or immediately hike the prices,” Jha added.
The NOC has said that the current level of its stock could meet supply of petrol, diesel and kerosene for only six more days, while air turbine fuel (ATF) would last for only eight days.
Because of its outstanding dues with IOC, it has been going through short supply since the IOC cuts a specified amount every month to clear the past dues.
Jha said supply of fuel had already been cut by a whopping 50 per cent, which would be further reduced in coming days. “The NOC’s outstanding dues to be paid to IOC are mounting up every day, whereas payment is dropping,” he said, adding that the supply also depends on NOC’s payment to IOC.
Apart from its immediate supply problems, the NOC is also facing a serious financial problem as its total outstanding dues to local banks and financial institutions have crossed Rs 15.24 billion.
Even though Nepal is not unique in facing the fuel problem, it has been unable to deal with it properly and in a sustainable manner.
