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| Kathmandu, Tuesday March 11, 2003 Falgun 27, 2059. |
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NOC asks Govt for Rs 1b to settle accounts
By Milan Mani Sharma
KATHMANDU, March 10 : Nepal Oil Corporation (NOC) has asked the government to release one
billion rupees immediately for settling account with the Indian Oil Corporation (IOC) for
the import of the petroleum products of January.
"With the fund of the NOC falling short to clear import accounts, which must be done
on March
15, the Corporation has no option but to turn to the government," said a highly
placed government
official.
He also added that the Indian counterpart has also pressed the NOC to clear other past
dues as
well. As the Indian fiscal year ends on March 31, the IOC wishes its account be settled by
the
end of the month.
The state-owned monopolist in petroleum imports needs to pay around Rs 2 billion to the
IOC and
this includes outstanding dues as well. "This amount includes Rs 1.70 billion for the
petroleum
import made in January," he added. The outstanding due of the NOC including the
short-payment
of the past months crosses over Rs 250 million.
A board member of the corporation, meanwhile, said that the IOC could be requested to
consider
the NOC’s problem and extend the payment deadline. "But that is not the issue.
The issue is how
to solve the NOC’s problem and prevent it from being plunged into a serious financial
crisis," he
said.
The NOC officials argued that the government’s announcement of latest price rise in
petrol and
cooking gas exhibited its ‘short-sightedness’. The NOC had urged the government
to increase
kerosene and diesel prices to the level of bordering Indian cities and townships. However,
government raised prices of petrol and cooking gas without changing kerosene and diesel
prices.
"The problem of the NOC was left where it was. Result: difference in procurement and
sales price
kept on widening and the NOC is left with no option but to plead the government for
meeting its
import cost," he said.
And the worse part is that unless price difference is closed the government might have to
support
the NOC with about a billion rupees every month for the import, he noted.
According to officials, the loss of the Corporation has risen since January when petroleum
prices
started soaring in the international market. They claim that the NOC is incurring a
monthly loss of
about Rs 660 million due to import-sales price disparity.
"The loss has also been triggered by the widened price gap across the border as major
petro-products are smuggled out of the country and the NOC needs to import more to make up
for
the artificial deficit," they said.
Currently, the prices of kerosene, diesel and petrol stand at Rs 28.80, Rs 36.40 and Rs
54.30 per
liter on the other side of the border respectively while in Nepal it is Rs 17, Rs 26.50
and Rs 52 per
liter respectively.
"Leave alone the cross border price gap in kerosene, price difference in diesel too
has gone up to
about Rs 10. It is difficult to understand what sort of business the government is pushing
NOC to
do," said the NOC board member.
Meanwhile, to check the massive outflow of kerosene, the NOC has contained its supply at
the
level recorded in July last year in the bordering cities. But that has failed to serve its
purpose.
"While the local consumers are facing the brunt of the NOC-government price war, the
cross-border smuggling of kerosene is going on unchecked," the source said, adding
that diesel
smuggling could also rise.
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