Petro-products consumption witnesses marginal surge

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KATHMANDU, Aug 7 - The nationwide consumption of petroleum products during the last fiscal year registered a marginal surge of less than one per cent as compared to the consumption recorded during the previous year.

According the statistics complied by Nepal Oil Corporation (NOC), the state-owned monopolist of importing all kinds of petro-products, the over all consumption of seven various petroleum products, registered a slight soar of 0.90 per cent to touch 822,915 kiloliter (KL) whereas such consumption in the previous fiscal year was 815,550 KL. However, the total consumption is less than the projected sales of 885,930 kiloliters for the fiscal year 2000/01.

Among the major petro-products that were consumed, the total sales of petrol, during the period, soared by 6.63 per cent to touch 59,269 KL from 55,585 KL recorded in the previous year. The soaring numbers of light vehicles, particularly, two wheelers and small cars, is the main cause for such rise.

Similarly, unlike the previous year, the annual consumption of diesel also registered a surge of five per cent to scale up to 326,198 KL from 310,569 KL recorded in the previous year. Such consumption in the previous year had recorded a nominal shrink of 1.65 per cent. The growth, however, is less than the NOC’s projected consumption growth rate of almost nine per cent for the last fiscal year.

The slowdown in the industrial activities prompted mainly by the soar in the violence, particularly in the fourth quarter of the last fiscal year, and complete withdrawal of power load-shedding were some of the leading factors such less-than-expected increase.

Similarly, the consumption of kerosene registered a decline of 4.45 per cent to remain at 316,381 KL from 331,120 KL recorded in the previous year. The shift of kerosene consumers towards gas consumption is the major reason behind such decline. After the announcement of heavy hike in the price of kerosene as compared to increment announced in the price of cooking gas, a remarkable chunk of kerosene users were shifted towards LPG regardless of slight increment in the total financial burden to the consumers.

In the like manner, the consumption of aviation fuel recorded slump of almost three per cent and remained at 55,198 KL from 56,849 KL recorded during the previous year. The sliding tourism industry, especially cancellation and deduction of some international flights and declining number of passengers of domestic flights are some of the chief reasons for the decline.

The double-digit tumble in the consumption of furnace oil (FO), which is one of the principal industrial inputs, also strongly revealed that the gloom hovering over the domestic industrial sector is further deepening. The overall annual consumption of FO, during the period, shrunk by over 16 per cent and remained at 22,363 KL from 26,811 KL consumed in the previous year.

Among all the petro-products, the growth in the consumption of LPG (widely known as cooking gas) remained highest. During the period, its consumption recorded a robust swell of almost 31 per cent to touch 40,102 tons against the consumption of 30,627 tons recorded in the previous year.

Excise Duty Bill tabled in House

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KATHMANDU, Aug 7 – A newly drafted Excise Duty Bill was presented to the Lower House for debate recently. Once the finance bill makes through the parliament, it will be stamped with the Royal Seal and enacted as the Excise Duty Act.

The bill has been prepared to bring effectiveness in revenue mobilization by identifying the items on which the excise duties can be charged. Furthermore, it will also define the scope of the excise duty officers.

The finance bill, made available to The Kathmandu Post, contains provisions that lay down the procedures for collecting the excise duties from service providers, manufacturers and traders.

The bill has made it mandatory for manufacturers, traders, sellers or service providers to obtain license before they deal in goods or services on which excise duties are levied.

The bill contains stringent provisions to curb evasion of excise duties. It has also conferred greater power to officers for taking action against excise duty evaders or defaulters.

To encourage the inflow of information relating to excise duties evasion and default, the new bill contains provisions to award the informants up to 50 per cent of the excise duties collected from the defaulters who are caught on the basis of the information provided by the informants. However, the total award cannot exceed Rs 50,000.

Anyone aware of anti-Act activities but failing to inform the authorities would be taken as an offense. They may be sent to jail for a maximum period of three months or fined a maximum amount of Rs 10,000.

Similarly, those defaulting or evading duties will be fined up to a tune of Rs 15,000 and retrieve up to Rs 25,000 in excise duties. In extreme cases, officers may as well confiscate the goods.

Govt likely to import sugar from India

By Vijay Babu Khatri

KATHMANDU, Aug 7 - The Ministry of Industry, Commerce and Supplies has submitted a proposal to the Cabinet to import 50,000 tons of sugar from India at the rate of 10 per cent customs duty, with a view to control price and to avoid scarcity.

The initiation has been taken to avoid the scarcity of sugar during major festivals like Dashain and Tihar, in keeping with the low production of sugar at home this year, said a highly placed source at the ministry.

It is proposed to reduce the customs duty from the existing 40 per cent to 10 per cent to provide sugar at an affordable price especially during such festivals when the demand for sugar surges, said the source.

The estimated consumption of sugar is 150,000 tons per year and the local production last year was 140,000 tons and the rest was met by import from India. This year’s production is only 100,000 tons. So the chances of scarcity of sugar is high.

Shashi Kant Agrawal, president of Nepal Sugar Producers Association, said that the debate on fixing the price of sugar cane delayed the production and the supply of sugarcane could not meet the demand. Sugarcane production dips every three years, according to experts.

Krishna Hari Baskota, Director General of Department of Commerce, said that according to a survey carried out recently, sugar stock would last only for the next two months and would be scarce during Dashain and Tihar. And if the duty is not reduced, the price will go up to Rs 36 per kg of sugar, he added.

Agrawal said that the customs duty on imported sugar should be lowered to 30 per cent as it costs IRs 12 per kg in India and would not exceed the present rate. The general price of sugar at present is Rs 30-31 while the National Trading Limited sells at Rs 29.10 per kg.

He said that the duty should not be lowered for ever as it would badly affects the domestic sugar industries, he said. The customs duty on imported sugar was raised to 40 per cent about two years ago with an objective of protecting the local industries.

While the National Trading Limited and the Salt Trading Corporation, two state-owned dealers in sugar, claim that the supply of sugar is lower than the demand, Agrawal and Baskota say that the sugar stock will last for one more month.

Ganga Bahadur Manandhar, president of Nepal Retailers’ Association said that neither the Salt Trading nor the National Trading Limited have sold sugar for the last four days, as a result price has risen by Rs 5 per kg.

However, Parameshwor Mahaseth, General Manager of Salt Trading Corporation, said that they have been providing 10 kg sugar per person to ward off scarcity of sugar before the proposed import comes to the market. "Our stock lasts only for two weeks," he added. National Trading has also followed suit.

He also said that if the proposed sugar enters the country by next week, the corporation would supply sugar as per the demand of the consumers. He assured that if the proposal gets through, consumers would get as much as sugar they want and the price would also not increase.

NATO flays RNAC decision

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KATHMANDU, Aug 7 - The Nepal Association of Tour Operators (NATO) has strongly raised its voice against the decision of the Royal Nepal Airlines Corporation (RNAC) to suspend its flights to Europe and Singapore, beginning September.

According to a press release issued here today, in the context of a nose-dive in the number of tourist arrivals since the past year and a half, the latest decision to suspend flights to Europe and Singapore will give a negative impression of Nepal as a tourist destination.

The decision would affect the business community and deprive them of business connection with the European markets. Besides, the latest decision is also not in line with the Destination 2002 Program which is in the offing, the release says.

Furthermore, the release states that NATO and Nepal Tourism Board (NTB) are jointly organizing a meeting of the heads of major tour operators across the globe who have been promoting Nepal. All efforts will go in vain if RNAC decides to withdraw its flights from Europe and Singapore.

FNCCI delegation meets Gautam

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KATHMANDU, Aug 7 - The newly constituted executive body of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today met with the General Secretary of the Communist Party of Nepal/Marxist-Leninist (CPN-ML) Bamdev Gautam.

According to a press release issued here today, Rabi Bhakta Shrestha, president of FNCCI, apprised Gautam over the current economic situation in Nepal and discussed various aspects of the Maoist insurgency.

Shrestha stressed that the recently declared cease-fire between the government and the Maoists is a positive indication towards cultivating a conducive environment for the Maoist-government talks, the release states.

Gautam on the occasion said that the private sector can play a major role in mitigating the government-Maoist conflict, the release says.

Similarly, the FNCCI executive body also met Dr Richard Vokes, Resident Representative of Asian Development Bank (ADB) and discussed the various areas which can be economically developed, states a separate press release issued here.

Shrestha said that the ADB has greatly aided Nepal in its economic endeavors. The release quotes Shrestha as saying, "The bank should relax its interest rates and widen its area of investment."

Dr Richard Vokes said that the thrust of the ADB is in enhancing the economic competitiveness of Nepali entrepreneurs and financial sector reform, among others.