Petro-price hike retraction ruled out

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KATHMANDU, Oct 22 - At a time when opposition political parties are demanding roll back of the recent petro-price hike announced by the government, Minister of Industry, Commerce and Supplies Ram Krishna Tamrakar has ruled out immediate possibility in its withdrawal.

Minister Tamrakar gave the above information at an interaction program organized in the Reporter’s Club here today.

"Petro-prices have been hiked in the context of surging international oil prices and depreciating rupee against the US dollar. Until and unless the oil prices in the international markets do no come down, prices here will not go down," he said.

He said that the price of kerosene in the international markets has now crossed over Rs 27 per litre. Under the circumstances, the present selling price of kerosene cannot be reduced, he said.

The government recently had hiked the prices of per litre kerosene, diesel and petrol from Rs 13 to Rs 26, Rs 23 to Rs 27.50 and Rs 40 to Rs 47 respectively. Similarly, it raised the price of LPG per cylinder from Rs 465 to Rs 550.

The government, in addition, had announced to provide 3 litres of kerosene per family per month at subsidized rates of Rs 15.50 per litre under the card system.

Stressing that the government is not in a position to increase the subsidy provided in kerosene, Minister Tamrakar said that providing 3 litres of subsidized kerosene to each of the 4 million families in the country would mean expenses of over Rs 12 million per month.

"Even a country like India whose domestic production is sufficient to meet its 35 percent of the total petroleum demands has increased petro-prices and provides only 2 litres of subsidized kerosene in some parts," he informed.

However, Minister Tamrakar also said that the government will provide subsidized kerosene also to those who live in rented houses in the urban and sub-urban areas. Subsidized kerosene to such families would be provided on the recommendations of the landlord and that of the ward committee.

At the same program, opposition Member of Parliament Bharat Mohan Adhikari alleged that the government’s decision to raise petro-prices was taken in haste at a time when prices in the international markets were likely to come down.

He said that CPN/UML would halt all its other activities and take to the street if the government does not roll back the price hike.

"The financial pressure caused by irregularities in Nepal Oil Corporation (NOC) has been shifted upon the shoulders of the common masses. The government must form an all party investigation committee to look into irregularities and leakage in NOC," he said.

President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pradeep Kumar Shrestha said though the government can have no control over swelling international prices, it should have raised the petro-prices phasewise to minimize the burden upon consumers.

Madan Raj Sharma, Executive Director of NOC, Radha Krishna Mainali, member of CPN/ML, Bishnu Bahadur Manandhar representing the grouping of nine left parties and Harendra Bahadur Shrestha, Chairman of Nepal Consumer Forum also spoke on the occasion.

CCIA demands more subsidized kerosene

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KATHMANDU, Oct 22 - Central Carpet Industries Association (CCIA) has flayed the recent government decision to hike prices of petroleum products and said that such step has severely affected major exporting industries, including the carpet industry, the largest foreign exchange earner as well as employment generator of the country.

According to a press release issued here today, the association has said that the unprecedented hike in the prices of petroleum products has increased the costs of production eroding the competitiveness of exportable goods in the international market.

The association has also criticized the newly introduced system of limited distribution of subsidized kerosene.

Since most labors are from outside the valley and largely rely on kerosene for cooking purposes, the arrangement of distributing just three liters of kerosene per family per month is ridiculous, the release says.

CCIA has demanded with the government to arrange the distribution of 10 to 12 liters of subsidized kerosene to carpet workers on the recommendations of the concerned carpet industry.

Economy, finance and market 

By Supa Upadhyay

Domestic Money Market:

The Average Weighted Discount Rate of 91-day TBs rose by 61 basis points to 5.18 percent compared to the previous month. The NRB had received 23 bids worth NPR 1160 million against the notified amount NPR 760 million. The rupee was traded higher at 98.81 and lower at 98.70. In the regular weekly auction, the NRB is going to issue 91 day TBs worth NPR 700 million on October 24, 2000. In the Interbank, overnight call money was traded at 5.00 percent.

Domestic capital market:

After the Dashain festival, the stock market resumed on a distinctly firm note on the back of continued speculative purchases. The NEPSE Index-100 sealed sharply 41.66 points to 471.12 compared to the Index closed before the festival. Nepal Bangladesh Bank registered as most expensive scrip on the trading board. Obviously, the prices of stock seems very expensive at the moment without having any justification. The foundation of this recovery looks neither strong nor sustainable. The new price of Everest Bank registered at NPR 1300 after book close offering 20 percent bonus share and 50 percent right issue. Last week, the trading was estimated at 88313 shares valued NPR 74.7 million. Commercial Banks alone shared 98.60 percent of the total traded amount. The Index of CBs and Finance/Insurance improved while the Hotel Sector lost. The Index of Production Sector, Business Sector and Other Sector remained unchanged.

Though brokers had quoted the prices of 46 companies on the trading board, only 30 companies were actually traded so far. NIC Bank, Nepal Bank Ltd and Everest Bank registered the first, the second and the third most traded companies trading 21850, 18739 and 5730 shares respectively.

Forex round-up:

The upside sentiment is still in favour of the safe haven currency USD. The Euro still fails to make any recovery. The ECB kept its official interest rates steady at last week policy meeting as expected. Dealers said that the market is cautious on Group of 20 finance ministers and central bankers will likely discuss the Euro when they begin meeting on Tuesday in Montreal. The yen fell to its lowest levels against the dollar in more than a week on Friday as news that a Japanese Life Insurance Company was on brink of failure cast shadows over Japan’s economy recovery. The INR depreciated 25 paisas over the week against the green back on high dollar demand.