KATHMANDU: Even though Nepal Oil Corporation has been adjusting the price of petroleum products dozens of times in line with international market prices, the state-owned petroleum monopoly’s monthly loss has crossed Rs 4.32 billion. As the selling price of petroleum products in the local market is less than the import price set by Indian Oil Corporation (IOC), the sole supplier of petroleum products for Nepal.
Umesh Thani, the Executive Director of NOC, said, “The loss occurred due to lower selling prices for the domestic market than import prices”. NOC is bearing a loss of Rs 4.19 per litre in petrol, Rs 21.92 per litre in diesel, and Rs 582.40 per cylinder in Liquified Petroleum Gas (LPG).
Thani, however, said NOC is enjoying a profit of Rs 3.03 per litre in kerosene and Rs 30.56 per litre in domestic aviation fuel, and USD 73.96 US dollars per kiloliter in international aviation fuel. NOC has set the price of petrol at Rs 181 per litre while the price of diesel and kerosene each is Rs 172 per litre. Similarly, the price of cooking gas is fixed at 1800 rupees per cylinder. In 15 days, the corporation is losing 407.4 million rupees from the trading of petrol and 1.326 million rupees from diesel.
In kerosene, NOC earns a profit of Rs1.8 million in 15 days. According to the corporation, there is a profit of 70.19 million rupees on domestic aviation
fuel and Rs 260.71 million in international aviation fuel over the period. NOC suffered has reported the highest ever loss amounting to Rs 7.74 billion 15 days in cooking gas.
Gradually, the price of petroleum products has started to decline in the international market. However, the corporation has not been able to adjust the price by lowering the price in the domestic market, saying that the accumulated losses are already too much. Even though the IOC published the reduced-price list on June 32, the corporation did not adjust the price in the domestic market.NOC is no longer in a position to arrange funds for importing petroleum products for loss-making trading of fossil fuels. The government has recently decided to provide a loan of Rs 7 billion to NOC to settle dues with IOC. A meeting of the Council of Ministers held on June 31st had decided to provide funds to NOC with a five-year repayment period.