India dismantles APM Monopoly of NOC ended

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KATHMANDU, April 1:Following the dismantle of Administered Pricing Mechanism (APM) in the petroleum products in India from today, it seems that the long-cherished dream of the private sector to import petroleum products into the country has been materialized, ending decade-old monopoly of Nepal Oil Corporation (NOC).

The withdrawal of the APM in India, among others, has ended the decade-old monopoly of the Indian Oil Corporation (IOC) in exporting petroleum products from India and has allowed Hindustan Oil, Bharat Petroleum and Reliance Oil, other three giant Indian oil refineries to export their products from India.

Though imports of petroleum products had been opened to the private sector long before, it was never materialized due to the agreement between NOC and the IOC, which barred the IOC to deal with any private Nepali party in oil trade.

Private sector says that all the major Indian oil refineries other than IOC have started eyeing Nepali oil market as a lucrative foreign market to export their products. However, lack of sound infrastructure in the private sector is the main obstacle to engage themselves in petro-products import business. "Private sector has a strong interest to deal in the petroleum business since long but we are not going to jump into the business immediately as we direly lack necessary infrastructure," said Hikmat Kumar Mali, President of Nepal Petroleum Dealers’ Association.

Though the new arrangement has opened the imports of all kinds of petroleum products in to country, the private sector is expected to engage only in the imports of petrol from Indian refineries to distribute in the country. "Petrol is the only products, in which the private sector can manage some profits while doing trade," said an official of NOC preferring anonymity.

Since the private sector would not be allowed to enjoy government subsidy while importing kerosene, diesel and liquefied petroleum gas (LPG), they would not jump into a loss-making trade,’’ said an oil market analysts.

Presently, the government charges Rs 11,750, Rs 3,600 and Rs 1,300 per kiloton customs duty on petrol, diesel and kerosene respectively.

Meanwhile, NOC and IOC have signed a five-year agreement to supply all refined oil necessary for Nepal. The new agreement, which comes into effect from today, is aimed at ensuring uninterrupted supply of petroleum products to Nepal after the roll back of the APM in India, said Madan Raj Sharma, Executive Director of NOC.

As per the new deal, NOC will purchase crude oil from the international market and hand over to IOC in Haldia port. And NOC will get refined petroleum products from Raxual oil depot equivalent to price of crude oil. NOC, however, will have to pay freight charges of IRs 1,500 per ton to transport refined oil from Haldia refinery to Raxual.

Similarly, NOC will purchase crude oil from the three Iraq, Egypt and Oman. The exporting countries have to be specified since the Indian refineries do not have facility to refine all types of crude oil purchased from anywhere else, informed NOC source.

As per the latest understanding, Nepal will initially import 1 million ton of crude oil for a period of one year and Nepal will get various refined petroleum products equal to the price of the crude oil.

After the withdrawal of APM in India, NOC is planning to review the domestic oil price on monthly basis aimed at curbing cross-border smuggling by adjusting oil price difference between Nepal and India. NOC presently reviews the domestic oil price on quarterly basis.

Under the new system, Indian private sector engaged in oil business would be free to fix the retail prices due to which oil price might fluctuate in line with international oil price. NOC officials say that if the timely adjustments are not taken under the new arrangement, a huge oil price difference between India and Nepal can emerge fueling cross-border smuggling. The monthly oil price review has become a necessity to bridge such price differences.

According to the agreement signed in 1974, NOC had been importing refined diesel and kerosene from the international market through competitive bidding and bartering it with all necessary petroleum products with IOC.

Pvt airlines to raise domestic airfare 

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KATHMANDU, April 1:Private sector airline companies have decided to increase the domestic airfare by seven to 12 per cent following the government’s decision to revise the fee structures in the aviation sector including a massive increment in registration and other fees for domestic airlines and helicopter companies.

Airlines entrepreneurs say that an understanding among them was reached to increase the airfare with effect from April 7. "We have no option to meet the increased operation cost other than increasing airfare," they say.

The revised fare for Kathmandu to Bhairahawa, Bhadrapur and Biratnagar would be raised by Rs 200 while that for Kathmandu-Nepalgunj by Rs 300 and for Kathmandu-Pokhara by Rs 100. Similarly, fare for mountain flights has been raised to US$ 127, an increase of US$ 16.

The fare has been hiked for the second time within three months. Earlier the airline companies had increased the fare by around 20 per cent following the government’s decision to revise the base fare from 20 to 40 per cent depending on the air routes.

The government increased the airfare last January after upon a plea of airline operators. They had stated that the industry would collapse if the fare were not revised. And immediately after the fare hike, the government, with an aim to provide further relief to the airlines sector, included the industry in the list of sick industries.

Along with the decision to increase the airfare, they have also decided to scrap the discount facilities provided to elder and minor citizens, students. According to the new provision 10 per cent fare would be charged for the children under the age of two years. Earlier, airlines used to give full discount to the children of this age group.

"The revision in the airfare has been made after the Civil Aviation Authority of Nepal (CAAN) decided to increase the fees of the aviation sector and charged the fees on US dollars," says Birendra Bahadur Basnet, Managing Director of the Buddha Air.

However, passengers say that the airfare revision is ill-timed. They say that the airline companies are doing well after revising the fare structure last January and after their inclusion in the list of sick industries.

Even the airlines have gained an unexpected increment on the number of domestic passengers because of increasing violence on the national highway, they added.

Committee formed to ease lending for foreign job seekers

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KATHMANDU, April 1: A meeting of bankers, foreign employment agencies and Employment Promotion Council (EPC) held on Friday constituted a four-member committee to work out details on lending and reimbursement procedures for foreign employment.

The committee is constituted under the chairmanship of Binod Kumar Bhattarai, Member-Secretary of the EPC and it has been assigned the job of preparing the lending and reimbursements details within three months, says a press release issued here today by the EPC.

The meeting chaired by the governor Dr Tilak Rawal was organised with a view to discuss as to how the loans could be provided to and reimbursed from the under-privileged population seeking employment abroad, without any collateral.

Dr Rawal said that the foreign employment is not only a foreign currency spinner, but also affects the balance of payment positively. Binod Kumar Bhattarai, meanwhile, stressing for the need to maintain underprivileged population’s access to foreign employment said that it would help to fight off the burgeoning unemployment problem.

"Access to loans without collateral to the incapable section of the society for employment abroad would also assist in poverty reduction," he stated.

Dan Bahadur Tamang, President of Nepal Foreign Employment Agencies’ Association expressed his commitment to make programmes of foreign employment successful.

Dr Ram Babu Pant and Bijaya Nath Bhattarai, Deputy-Governors and Chief Executive Officers of various private commercial banks were also present on the occasion.

Nepal to host Sixth Asia-Pacific Cooperative Ministers’ meet

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KATHMANDU, April 1:With an objective of establishing Relevant Policies and Legislation for Co-operatives in the New Millennium, sixth Asia Pacific Co-operative Ministers’ Conference is being held in the capital from April 3 to 7.

Speaking at a press conference organised here today to unveil the programme, Shil Kwan Lee, Regional Director of the ICA-ROAP said that the conference would review the existing legislative policies of different countries and evaluate its relevance in a changing global environment.

"As sound and efficient management is required for the success of co-operative movement, conference would emphasise on strengthening the management of co-operative societies," he said. The conference would also analyse the role of governments in developing the co-operatives movement in the member countries, he said.

B D Sharma, Director at the ICA-ROAP highlighted the outcomes of an earlier conference and stressed upon the need to organise the sixth conference. "This meet targets creating conducive and dynamic policy to the development of co-operative sector." The laws and the legislation must be formulated on the basis of national policy thus designed, he added.

He also said that the fifth Ministerial Conference held in Beijing, China in 1999 had focussed on creating an enabling environment in the development and the growth of the co-operative, particularly to the development of member-based co-operatives.

Deepak Prakash Baskota, Chairman of the National Co-operative Federation of Nepal speaking on Nepal’s co-operative movement said, "Co-operative movement in Nepal has not grown as per our expectation. Most of the activities of the movement is focused on developing infrastructure."

According to a press handout distributed on the occasion, a total of 200 delegates from 18 different countries and eight international organisations including 13 ministers will attend the conference. Prime Minister Sher Bahadur Deuba is scheduled to inaugurate the conference.

During a three-day programme, Mitsuhiro Miyakoshi, Parliamentary Secretary of the Government of Japan will speak on the role of Agricultural Co-operatives for the co-existence of various types of agriculture, says the release. Tilak Rawal, Governor of Nepal would speak on the perspectives for Co-operative Bank while the ministers from several countries would present their country statements at the conference.

According to the release, a preparatory meeting for the sixth conference was also organised in Iran in July 2001. The consultation meeting had advanced some possible items for the conference of which Reforms in co-operatives legislation, Proximity to the ICA, Co-operative identity Statement, Impact of Taxation on Co-operative are the main ones, says the release.

Nepal has continuously been participating in the ministerial conference since the second conference held in Jakarta in 1992 and is hosting for the event first time.

The programme is being organised by International Co-operative Alliance–Regional Office for Asia and Pacific (ICA-ROAP) and supported and co-ordinated by His Majesty’s Government of Nepal, Ministry of Agriculture and Co-operatives and National Co-operatives Federation of Nepal.

NCC urges govt to boost economy

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KATHMANDU, April 1:The 49th Annual General Meeting (AGM) of Nepal Chamber of Commerce (NCC), which ended today, has placed various demands to the government for boosting the shrinking economy.

According to a press release issued here today, the NCC’s AGM passed resolution demanding the government to scale up income tax exemption to Rs 100,000 for individual and Rs 150,000 for family from the existing Rs 55,000 and Rs 75,000 respectively.

Similarly, it has demanded to introduce a 5 per cent rebate to taxpayers paying their bills on time. "The government should pay interest to the taxpayers in case it fails to reimburse them the tax amount," states the release.

Referring to the plunging foreign trade, the AGM has urged the government to introduce special packages to the export oriented industries for enabling them to withstand the current economic slowdown.

It has urged the government to scrap various duties levied on exports, establish Export Processing Zone immediately and exempt income tax on incomes from exports.

Similarly, promoting exporters participation in international trade fairs and economic diplomacy are other demands of the NCC.

It has demanded with the government to relax import policies by scarping monopoly in the import of petroleum products and salt. The meeting has urged for withdrawing sub-clause 4 of clause 9 of Financial Regulations arguing that it has affected the imports.

The meeting also urged the government to bail out the ailing tourism industry and asked the local authorities to review various fees and taxes. It also voiced out for flexible labour law to attract foreign investments and asked the government to request the Indian government to arrange quarantine checkpoints in all major customs points.

Similarly, the AGM has expressed dissatisfaction over the Nepal Rastra Bank’s imposition of business credibility information on imports and has asked the government to allow the local traders to transact in dollars while dealing with tourists and exchange their dollars under certain conditions.

The NCC has even asked the government to reduce the foreign exchange spread to 15 paisa and slash the royalty paid to Royal Nepal Airlines on export cargo and to slash the mobile phone’s charge to Rs 3 per minute and make the incoming calls free.

It stressed that the government should implement the hand-carry exports system, as stated in the 1999-2000 budget speech and to provide soft loans to exporters, based on the exports registered during the previous year.