Pressure on domestic oil price recedes

By a Post Reporter

KATHMANDU March 29 - Pressure on domestic oil prices has receded after the decision by OPEC, the international cartel of 11 oil producing countries, to increase the oil production by 1.7 million barrel per day at the end of a two-day long annual meeting in Vienna, Austria.

Amid heated debate and opposition from the small oil-producing members like Iran, Algeria and Libya, OPEC (Organization of Petroleum Exporting Countries) decided to restore the previous level of oil production.

With the OPEC decision, the world will now pump out 76.7 million barrel of oil per day- still three hundred thousand barrel short of world daily consumption level.

Consequently, the international price of oil has started to scale back. Based on today’s international price of the refined oil, the new per metric ton price for diesel and kerosene at Haldia Port (where international supplier hands-over oil to Nepal Oil Corporation) would be US $ 248.19 and US $ 242.13 respectively. This price level is significantly lower than the last price offered by international oil suppliers to NOC.

Vitol Geneva, a Swiss Oil supplier, which won the competitive bidding, to supply oil during the last bid on March 15, offered US $ 277.25 for per ton of kerosene and US $ 277 for per ton of diesel.

The second top bidder, Glencore Singapore, offered US $ 292.99 per ton for diesel and US $ 292.28 per ton for kerosene.

Since the International price has declined significantly and is expected to plunge further as the Northern Hemisphere’s winter ends (some estimates put the tag at 2.7 million barrel per day), the threat of domestic price rise seems averted. Yuba Raj Sharma, Managing Director of NOC also says, "Now there is no chance of petroleum price to rise, at least until the end of the current fiscal year ending mid-July."

Until last week, the danger of domestic petroleum price rise looked imminent, for the second time within a period of six months when India raised the price of petroleum products providing a "natural excuse" for NOC to raise the price.

International petroleum price has seen an unexpected swing from bust to bump in the last one year. Crude oil prices sank to US $ 10 per barrel in early March last year, hitting roughly what it used to cost before the First Oil Shock of 1973. Contrary to the much-hyped international media threat of "drowning in cheap oil," crude oil price soared up again hitting as high as US $ 34 per barrel last week, reaching its highest level since the Gulf War in 1991. Such a rise in the international price of petroleum invited severe criticism especially from the United States, the largest oil consumer. OPEC’s current decision is also mainly a yield to the mounting international pressure.

EPM 2000 expected to enhance foreign investment

By a Post Reporter

KATHMANDU, March 29 - Industry and Commerce Minister Ram Krishna Tamrakar has said that Export Promotion Meeting (EPM) 2000, going to be held in Kathmandu for three days from April 5, is expected to enhance trade and investment scenario in the country.

According to the Minister, it would be the first event to congregate honorary consuls of Nepal from over 34 countries and high level government officials and local business people. "The meeting will strengthen Nepal’s economic relations and provide a forum for the promotion of export and augment foreign investment scenario in the country," he added.

The Minister said that so far 27 Honorary Consuls have already confirmed their participation. In addition 163 representatives from foreign business houses and over 300 participants from local institutes have already confirmed their representation.

The highlights of the Meeting would be the address of Foreign Affairs Minister, Finance Minister, Water Resources Minister and Industry and Commerce Minister. The Foreign Affairs Minister would be talking on Nepal’s foreign policy and direct the Honorary Consuls on ways to pursue economic diplomacy. Similarly, other ministers will talk on economic policies, water resources policies and industrial and commercial policies.

The Minister is hopeful that the presence of foreign Honorary Consuls and other business people would also help Nepal to clarify its policies and programs. "I hope our foreign delegates would be helping us to lobby in their respective countries, regarding our bi-lateral negotiations in the process of accession to WTO," he said.

Addressing a press query regarding the announcement of Nepal bandh, that falls on the second day of the Meeting, Minister Tamrakar said, "We hope a responsible party of the country would consider the event sincerely. However, the Government has done all the preparations for the safety and smooth operation of the Meeting."

Commenting on the recently implemented Special Additional Duty by India, he said the country is sympathetically considering to waive the provision for Nepal, which is "against the spirit of Trade Treaty reached between the two countries."

The Meeting’s major objectives are to promote foreign investment for sustainable development of the country, promotion of tourism, perpetuate the markets of carpet and garment, seek appropriate and sustainable markets for other exportable items, discuss with foreign participants on the strategies for Nepal to reap maximum benefits from South Asian free trade and to build up support from friendly countries on Nepal’s accession to World Trade Organization (WTO).

Under the Chairmanship of the Minister of Commerce a high level 13-member Main Organizing Committee has been formed. Minister of State for Commerce is Vice Chairman of the Committee and Member of the National Planning Commission (looking after commerce), Secretaries of the Ministries of Commerce, Industry, Finance, Foreign Affairs and Home are its members. The other members include President of Nepalese Chambers of Commerce and Industry (FNCCI), Chief Executive Officer of Nepal Tourism Board, Executive Director of Trade Promotion Center and Chief of Protocol of Ministry of Foreign Affairs. Joint-Secretary of Ministry of Commerce is the Member Secretary of the organizing committee.

During the Meeting participants would be discussing the issues of areas for foreign investment in Nepal, tourism potentials, export promotion and economic activities in the country. The participants will be provided with the opportunity to sign Memorandum of Understanding (MoU) on trade and investment in the venue itself.

Scraps collection dwindles, refuse & pollution mount

By Sudeep Shrestha

KATHMANDU, March 29 - The decline in the re-use and recycling of scraps like empty bottles and used papers witnessed in the recent years has not only contributed to the perennial problem of pollution in the metropolis but has also drained off foreign exchange by importing new bottles from abroad.

After the government decided in February 1996 to levy tax on scraps collected by individual scavengers through District Development Committees (DDCs), it slowed down the re-use of mostly empty bottles and used papers.

Ram Hira Pathak, Manager with Gaurav Suppliers, who has been involved in the business of scraps for the past 10 years, says that the collection of scraps has seen 80 percent decline since 1996 after the DDCs began imposing tax on scraps.

Among the scraps, empty bottles and used paper collection has been most affected by the government decision. The import of bottles and paper is evidence.

Earlier, some 2 million bottles were imported annually while the number of bottles imported last year rose to 6 million. And it is expected to touch the 10 million mark this year, according to businessmen.

Similarly, it has also affected the domestic paper industries, the main raw material of which is used paper. But now they have started using other materials and even imported paper for their production spending hard earned foreign currency for materials scattered in abundance at home.

This apart, the collection of plastic products, jute sacks, tins, polythene and other metals has also shrunk.

The DDCs in December 1999 revised the tax on scraps levying Re. 1 on per bottle (beer), Re. 0.10 to 25 per small bottle, Rs 2 on per kg used papers and iron scraps, Re. 1 per kg on other papers and plastic goods, Rs 5 on per kg copper and alloy scraps and Re. 0.50 to 1 on per tin items.

Before 1996, the Solid Waste Management and Mobilization Centre used to collect nominal tax on scraps like Re. 0.02 on per kg used papers, Re. 0.07 on per bottle and Re. 0.15 on per kg iron scraps.

The government implemented the Local Self-Governance Regulation 2056 on 30 December 1999 and reduced the tax levied on scraps by 50 percent. This was expected to increase the re-use and recycling of scraps but unfortunately three months have passed and the DDCs are imposing the same old rates till date. This has discouraged the collection of scraps further polluting the three cities of the valley.

However, the Regulation has not reduced the tax on bottles and tin items.

Ramesh Shrestha, Vice-Chairman of Bhaktapur DDC, which has been collecting the tax on scraps this year (the tax on scraps is collected by all the three DDCs of the valley in turn) says the tax is being collected as per the understanding reached between the DDCs and the contractors.

However, the DDCs can reduce the tax but they are not doing this for the fear of losing some amount of money agreed between them and the contractors before the government reduced the tax by implementing the Regulation three months back, says Maya Nath Kandel, a businessman involved in the collection of scraps in the valley.

"Ministry of Local Development has formed a high level committee to consider the new tax rate. Unless the committee decides otherwise, we will keep on levying the old rates," says Shrestha.

Our demand is that the tax rates be increased by amending the existing Regulation, he adds.

The Regulation bars more than a tax imposition of the same nature on scraps, but taxes are being collected at various places in the name of ‘entry fees’, alleges Kandel.

"In other countries government allocates funds for clearing refuse, but here (in Nepal) you have to pay tax while collecting wastes. Not only that, even an Act is not implemented," complains an official with the Bottlers Nepal Limited requesting anonymity.

The company had filed a writ petition with the Supreme Court challenging the decision of the DDCs to levy a tax of Re. 0.40 per bottle of soft drinks against Re. 0.10 fixed by the government. The Court issued an interim order but the DDCs have been disobeying the order.

According to Ram Hira Pathak, 10 trucks of solid wastes is exported from the valley daily. Once the Regulation is implemented, the number of trucks ferrying the refuse would reach 15 per day, which will reduce at least 100 tons of solid waste of the capital everyday, claims Pathak.

CP Khetan, Managing Director of Gorkha Brewery says though tax was levied on empty bottles before the implementation of the Local Self-Governance Regulation, now it has been legalized. "The factories have presently stopped buying old bottles. The stockpiling will create a problem", Khetan says.

Pathak says the dwindle in scraps collection has resulted in loss of job in big number. If the tax is levied as stipulated by the Regulation or if it is waived, the number of scraps collectors would grow to some 30 thousand, he claims.

Entrepreneurs demand for early resumption of IA flights

By a Post Reporter

KATHMANDU, March 29 - Tourism entrepreneurs assembled here today at an interaction programme on "Resumption of Indian Airlines (IA) flight vis-a-vis increasing air seat capacity" stressed an early resumption of its flight that has been postponed since the hijack of IC-814 on December, 1999.

The protracted confusion regarding the resumption of IA to Nepal was attributed mainly to security concerns.

IA has not flown to Nepal since the past 80 days that has heavily affected the revenue of the country amounting about 700 million rupees, tourism people says.

At a hastily organized interaction programme by Hotel Association Nepal (HAN), various tourism entrepreneurs raised the issues like increment of air seat capacity for Nepal, setting up alternative airlines besides Royal Nepal Airlines Corporation (RNAC) and establishing second international airport. The interaction programme coincided with the Indian officials meet for dialogue on flight resumption.

President of HAN Narendra Bajracharya strongly asked to resume IA flights to Nepal as early as possible and give a sigh of relief to tourism industry.

However, tourism entrepreneurs including HAN’s president expressed serious concerns over security issue at Tribhuvan International Airport (TIA). They are hopeful that Indian side’s demand for additional precaution for security purpose will not go beyond the rules and regulation of International Civil Aviation Organization (ICAO).

Tourism entrepreneurs raised the issue that the term ‘security’ has been misinterpreted.

They also demanded to strengthen RNAC to meet the increasing demand of aircraft.

Nepal and India reviewed agreement in 1997 and under the new accord 6,000 one-way air seats per week was provided to Nepal and allow other Nepalese private air lines to operate flights to Indian cities.

Under the arrangement, of the total 6,000 air seats, 610, 600 and 880 have been allocated to Necon Air, Alpine Air and Nepal International Airways, respectively. And the rest has been put aside for RNAC. Though, Alpine Air and Nepal International Airways were provided with Aircraft Operating Certificates (AOC) they have not started their operation yet.

It is said that RNAC has been hardly utilizing 3,400 seats per week and Necon Air is using only 210 seats. Therefore, capable airlines like Buddha air should be allowed to fly to cross border flights.

At the interaction, Managing Director of Buddha Air Birendra Bahadur Basnet expressed his willingness for cross border flights if the government allowed.

Bhola Bikram Thapa of NATA, Yogendra Shakya of NICA, J L Khanna of Nepal Association of Tour Operators, Ashok Pokhrel of PATA Nepal Chapter, Shyam Bahadur Pandey, former president of HAN and Bharat Basnet of Explore Nepal Group also raised tourism issues seriously and demanded to immediately resume IA flights, to establish new airlines by forming a consortium of business group, hoteliers, travel agents and to strengthen RNAC, the national flag carrier.

Meanwhile, a 21-member delegation of tourism entrepreneurs led by HAN met with Prime Minister Girija Prasad Koirala today and apprised him of the problems facing the tourism sector.

The delegation raised the issue of Indian Airlines flight suspension which has incurred a huge loss of revenue to the country. The Prime Minister was apprised of the security arrangements at TIA which, the delegation asserted that the provision should be as per the international laws and practices. Furthermore, the IA flights should resume soon, they demanded.

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Nepal Stock Exchange
Singhadurbar Plaza, Kathmandu

29 March, 2000

Trading Information                                         Trading Price

Paid-up value of S. N. 9 is 57.
Paid-up value of S. No. 10 is 10.
Paid-up value of S. No. 19 and 21 is 60.
Paid-up value of S. No. 20 is 65.
NEPSE Index : 326.78 (-0.02) Base : 12th. Feb, 1994 = 100