NOC under pressure to review oil prices

By Prem Khanal

KATHMANDU, Nov 23 – As the international oil price has declined to the lowest level in two years, pressure is mounting on Nepal Oil Corporation (NOC), the state-owned monopolist responsible for the imports of petroleum products, to review its domestic petro-prices.

The government last year, while hiking the prices of petroleum products, had promised that the prices would be reviewed if the international oil price fell.

The then minister of Industry, Commerce, and Supplies Ram Krishna Tamrakar had announced that the government would adopt a policy of reviewing the petro-prices correlating it directly with the international oil price.

Since the international oil price has plunged to less than US $ 19 dollars per barrel after September 11 attacks on the United States, pressure is mounting upon the government to implement its petro-price policy announced last year.

Alone with the decline in the global oil price, the purchasing oil price of NOC from the international market has also declined by around 30 per cent. The global oil price had increased immediately after the terrorist attack in America and the NOC had paid US $ 273 per ton kerosene last September.

However, in its last purchase, per ton price of kerosene tumbled drastically to touch US $198 per ton, which is around 50 per cent less than last year’s purchasing price. During that time, the international kerosene price had skyrocketed to touch US $ 380 per ton and the government had announced a massive price hike citing a huge financial loss of more than Rs 3 billion.

As per the understanding with the Indian Oil Corporation (IOC), NOC buys kerosene from international market and exchanges it with petrol and diesel in India.

Officials of the NOC say that despite the decline in the international oil price, domestic oil price will not be reviewed immediately. "Since it takes at least 3 months for the newly purchased oil consignment to arrive here, prices can only be reviewed after that," said Madan Raj Sharma, Executive Director of NOC.

He also said that the existing oil supply was purchased on May, June, and July and the global kerosene price at that time was US $ 260 to 300 per ton.

However, NOC officials say that the possibility of immediate down revision of the domestic petro-prices is slim since the Indian oil minister has clearly ruled out such possibility and as long as India doesn’t decrease the price, it would be technically impossible for Nepal to cut prices.

"The existing difference in the petro-price between Nepal and India has been a serious problem for NOC and it has forced the corporation to bear heavy losses due to the ongoing smuggling of perto-products from Nepal to India," Sharma added.

He also said that if the domestic prices are lowered without the parallel decline in India, the existing price difference would be further widened and the illegal outflow of petroleum products from Nepal to India could scale to an unbearable level.

‘Treaty renewal should address mutual concern’

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KATHMANDU, Nov 23 – Indian Ambassador to Nepal Deb Mukharji has reiterated that the government of India is committed to renew the Nepal-India Trade Treaty 1996 without hurting the basic spirit of the Treaty but stressed that the upcoming renewal should address each other’s concerns.

Addressing the sixth and seventh Annual General Meeting (AGM) of Nepal-India Chamber of Commerce and Industry (NICCI) here today, Ambassador Mukharji expressed his confidence that the ongoing negotiation between the two countries on renewing the trade treaty would be able to find a solution acceptable for both the sides.

Highligh-ting the traditionally warm relationship between Nepal and India, he said that such friendly relationship has been reflected in many bilateral agreements, particularly in the 1996 Nepal-India Trade Treaty. "The Treaty has greatly helped to boost Nepal’s export and Indian investment in Nepal, which has helped to diversify Nepali exports in recent years," he added.

Speaking on the same occasion, Rabi Bhakta Shrestha, President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) also pointed out that the Trade Treaty should be renewed by maintaining its basic spirit.

"The Treaty has benefited both Nepal and India as it has provided a lucrative market for the Indian products without any difficulties while Nepal has received much-needed investments helping to boost its industrialization," he added.

He also said that the fast track investment system, which allows easy Indian investment up to IRs 3.50 billion to Nepal, has not produced desired results, particularly in the hydropower sector.

Addressing the function, Gopal Man Shrestha, Minister for Forest and Soil said that the government is well-aware of the problems being faced by domestic industries and assured that the government is seriously examining various possible ways to help the industries.

Referring to the ongoing trade negotiation between Nepal and India, he expressed his confidence that the treaty would be renewed in a cordial environ-ment.

Rukma Shumsher Rana, President of NICCI stressed that both the countries must understand each other’s sensitivity of national interests and added that it is an important issue to be considered while renewing the Trade Treaty.

Meanwhile, Arun Chaudhary, the newly elected President of NICCI has expressed his commitment of putting thrust for further enhancing and strengthening trade relations between Nepal and India, states a press release issued here today.

He also said that he would try to establish a similar chamber like NICCI in India for the regular discussion on business with counterparts in both countries and to avoid situations like the current row in renewing the Treaty.

On the occasion, NICCI Excellence Award 2000 was given to Dabur India Limited on the big industries’ category whereas Asian Paints grabbed the Award on behalf of small industries.

LDCs to benefit from Doha meet

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KATHMANDU, Nov 23 - Unlike in the Seattle ministerial conference of the World Trade Organisation (WTO), the developing and least developed countries were able to make their presence felt in the decision making process of the recently concluded fourth ministerial conference of the WTO at Doha. It turned out to be a ‘give and take bargaining place’ between the developed and developing countries.

This was disclosed by the delegates and journalists who returned home after participating in the week long Doha meet. They were sharing their experiences Friday at a talk programme on "WTO and Doha Round: The Road Ahead for Nepal" organised by South Asia Watch on Trade, Economics and Environment (SAWTEE).

The speakers basically discussed the past, present and future activities of Nepal regarding its accession to the WTO and its implications to the country. Speaking about past experiences and the road travelled by Nepal up to Doha, Prachand Man Shrestha, Joint Secretary at Ministry of Industry, Commerce and Supplies said it is now established that Nepal will be in a more advantageous position by joining the WTO and the possibility of remaining aloof from it is well-nigh impossible.

Since Nepal could not accede to General Agreement on Tariff and Trade (GATT), the procedure to accession to WTO happened to be quite complicated, said Shrestha. However, "We have made some progress in the accession process and have been able to convince the members that least developed countries (LDCs) are marginalized," he added.

He also said the WTO provides a way to continue with the existing bilateral trading system even after the accession to the multilateral trading system.

Posh Raj Pandey, Manager of Nepal’s Accession to WTO (NAW) said that the delegates in Doha reaffirmed their commitments to rule-based, open and non-discriminatory multilateral trading system. The Doha meet has decided to forward negotiation by recognising the developing needs of the LDCs especially food security and rural development, he said.

The time to comply with the Trade-Related Intellectual Property Rights (TRIPS) has been extended to 2016 and the intellectual property rights of geographical indication which was previously limited to wine and spirits has been extended to other sectors also, he added. The developed countries have also agreed to move forward the negotiations with the objectives of providing duty-free, quota-free market access to the goods of LDCs, Pandey said.

Suresh Shrestha, Joint Secretary at the Ministry said that the Doha meet had come a long way in comparison to the Seattle meet and the developed countries have changed their attitudes towards developing countries and LDCs. Dr Ramesh C Arya, Executive Director of SAWTEE also spoke on the occasion.

Manakamana Darshan to expand its service

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KATHMANDU, Nov 23 - Emboldened by the success of Manakamana cable car service, Manakamana Darshan Pvt Ltd, the only operator of cable car in the kingdom, is planning to expand its service to other places of great religious importance.

"We are in the final stage of opening up another cable car service in yet another religious place," said Rajesh Babu Shrestha, Managing Director of the company, without specifying the site.

Tourism and religion are but the two sides of a coin. There is no possibility of operating another cable car service neglecting religion. Therefore, our new venture would be of course at another religiously popular place, he added.

Manakamana cable car service has progressed just because of religious attachment the locals give to the Temple of Manakamana. If we target the domestic tourists, it will minimize risks and would lead to a success, he said.

The cable car service has completed third year of operation, linking Kurintar of Chitwan district with Manakamana village development committee (VDC) thereby facilitating pilgrims to visit Manakamana Temple.

The cable car has served over 1.4 million passengers over the years and it has been doing good business.

We have repaid 40 per cent of our loan and the financiers, which were reluctant to lend us then, are eager to finance now, thanks to our performance, said Rajesh Babu Shrestha.

However, we could not do good business in the third year due mainly to frequent general strikes, sense of insecurity, the Royal Palace massacre, landslide at the Prithvi Highway and anti-Hritik demonstration, he added.

The government should encourage entrepreneurs and provide more facilities, but the facilities are confined to paper only. Government should accord priority to cable car service, but it has the tendency of discouraging us, he lamented.

Nepal Bank Limited, Employees Provident Fund, Nepal Industrial Development Corporation and Nepal Bangladesh Bank are the financiers of the company.

E-commerce promotion stressed

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KATHMANDU, Nov 23 - Experts attending a three-day South Asian Association for Regional Cooperation (SAARC) seminar on e-commerce pointed out the need of infrastructure development in order to introduce e-commerce much effectively in this region.

The seminar which is being attended by 25 delegates from six SAARC countries except Maldives is being jointly hosted by HMG Nepal, Ministry of Information and Communication (MoIC) and Nepal Telecommunications Corporation (NTC) and is financed by SAARC-Japan Special Fund.

Addressing the inaugural session of the seminar, State Minister of Information and Communication, Hari Narayan Choudhary said that the programme was arranged at most appropriate time. He further said, "The deliberation of this seminar would help us to chart out a set of principles along with appropriate course of action that have to be taken for the development of e-commerce activities in the SAARC region."

Stressing upon the integration of Internets up to the rural masses for the development of e-commerce he said, "Government is trying to get equipped with the tools for manpower development, enactment of necessary cyber laws, formulation of policies and creating awareness among the people especially engaged in business."

Sri Ram Poudel, Secretary at the MoIC pointing out the objectives of the seminar said, "The major objective of the seminar is to create awareness about e-commerce activities in the SAARC region." The exchange of the opinions from all the delegates would be useful to promote e-business in this region, he added.

Dr Rameshananda Vaidya, member of the National Planning Commission (NPC) said that good banking service is the major issue on successful implication of e-commerce. "Also, there are legal problems on using e-commerce in practice because it is not accepted for tax purposes," he added, "Such problem needs to be solved."

Nihal Rodrigo, Secretary General, SAARC said that Information Technology is growing in remarkable way. He further said, "The importance of e-commerce is higher as it reduces time delay against the traditional system and also provides higher level of consumer satisfaction."

Prithvi Raj Ligal, Vice Chairman at the NPC, said that there is a need to focus on strengthening e-commerce to expand trade. "The seminar has higher importance as the tenth five year plan is under preparation and the outcomes of the seminar would be helpful to enhance the IT sector in Nepal," he added.

LML World showroom inaugurated

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KATHMANDU, Nov 23 - Manisha Koirala, a renowned film actress inaugurated the LML World - showroom of LML brand of motorcycles amid a function here today.

LML Limited, India’s second largest scooter manufacturer, introduced its motorcycles to the Nepalese market, after a couple of months of success in India. The company produces Adreno FX and Energy FX - two models of FX series of motorcycles.

The recently 110 cc, 9 bhp, 3-valve and 4-speed engines motor bikes are fuel efficient, comfortable and sturdy fit for riding in any type of road, according to Dharmendra Mishra, Zonal Manager of LML Limited, Calcutta, India.

Mishra also inaugurated the service centre of LML motorcycles at Teku. Speaking at a press meet organized today, Mishra said that the company has sold over 100 units of bikes within the past 10 days.

"The company, which has its plant in Kanpur, India aims at acquiring 10 per cent of Nepalese market with a sale target of 350 to 400 bikes per month by April," said he.

The company is said to employ 125 people after its all sales outlets come into operation. Outside valley, five outlets of LML are already operational in Biratnagar, Dharan, Pokhara, Janakpur and Narayangarh. Shreeansh International is the authorized distributor of LML bikes for Nepal.