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Kathmandu Tuesday June 26, 2001 Ashadh 12, 2058.
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Nepal Oil
Corp fixes LPG price
Post Report
KATHMANDU, June 25 - After months long confusion, the Nepal
Oil Corporation (NOC), the state owned monopolist importer of petroleum products, has
finally fixed the selling price of Liquefied Petroleum Gas (LPG) for vehicles from the
newly established LPG refueling stations.
Madan Raj Sharma, Executive Director of NOC informed The
Kathmandu Post that the per liter selling rate of LPG through the auto gas stations has
been fixed at Rs 22, equal to price fixed for cooking LPG.
The price fixing announcement came after a long-existed
dilemma of both the government and NOC, as to whether the selling price of vehicle LPG
should be above or below the price of subsidized LPG for cooking purpose. The price
related quandary had become so complicated that NOC even requested Ministry of Industry,
Commerce and Supplies to recommend possible solutions.
Currently two privately owned refueling stations, one in
Chabahil and another in Kalanki have started dispensing LPG into the in-built LPG tank of
the gas powered vehicles. Since around 1,000 LPG-powered vehicles absorb a substantial
portion of imported LPG and occupy a remarkable number of cylinders, the operations of the
stations are expected to help in solving the frequently occurring LPG shortage in the
valley.
Sharma said that after some time when most of the vehicles
start using their in-built tanks, around 5,000 cylinders would be released into the market
for household use.
When asked about the possible hike in LPG price, Sharma
clarified that the NOC’s proposals related with the hike in the prices of LPG, which
was submitted with Ministry of Industry, Commerce and Supplies, is still alive and said
that the price hike may be announced.
NOC had sent a proposal to the concerned ministry to hike
the price of LPG arguing that the whopping increase of around 40 per cent in the
purchasing price of LPG has left NOC with no option than to restructure the LPG price. The
per ton price of LPG has swelled to touch US$ 375 presently, up from US$ 280 per ton at
the time when the last hike announcement was made.
With the latest increment in the price of LPG in the
international market, the net per cylinder loss to NOC in the LPG transaction has also
escalated. "The net per cylinder loss in the LPG has jumped to Rs 165 against Rs 102
set at the last petro-price hike announcement," said Sharma.
He further informed that since NOC currently imports 3,700
tons of LPG a month, the accumulated annual loss for only in the LPG transaction will
surge to Rs 500 million, if immediate steps are not taken.
Sharma also informed that the NOC has received a proposal
from the Indian Oil Corporation (IOC) regarding joint venture for the construction of
proposed LPG bottling plant in Janakpur. Sharma informed that IOC has proposed two
different options with NOC for the partnership.
First, equal investment of NOC and IOC in the project.
Second, 26 per cent investment from each side, and the rest from public flotation. He also
hinted that NOC is in the favour of the second proposal as it ensures public involvement.
Bothered by the frequent disturbance in the regular supply
of LPG, the NOC, some five months ago, had decided to construct a gas storage depot and to
start its own distribution channels at the estimated cost of Rs 300-400 million.
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