Nepal is now going through a severe oil crisis. The main importer of oil inside the country, Nepal Oil Corporation (NOC) has been incurring huge loss for several years. The organization owes a large amount of money to Indian Oil Corporation and Nepalese Banks. On May 22nd, NOC forecasted another severe fuel shortage in Nepal in case of the government’s failure to increase price of petrol or grant loan. Considering the situation, Nepalese Prime Minister Girija Prasad Koirala promised to give Nepal Oil Corporation will give Rs. 1 billion to ease its dues and enable it to import more fuel to normalize the supply. Last month, NOC received Rs.500 million from the government to clear its debts.
The Himalayan Times reports:
NOC had said that sale and distribution of petroleum products was likely to come to a grinding halt as it was running out of stockpile. NOC officials had informed that they have petrol, diesel and kerosene available for only six more days and air turbine fuel for another eight days.
Minister for Industry Commerce and Supplies Shyam Sundar Gupta met PM Koirala at his official residence in Baluwatar this morning with the proposal to grant extra loan to the NOC to maintain a smooth import of fuel. “I apprised the Prime Minister about current state of petroleum supply and NOC’s financial health,” he told this daily.
Last week, NOC received Rs. 800 million from the government. Mr. Shyam Sundar Gupta said that they proposed for a grant of Rs. 2billion but the ministry of finance agreed to give more than Rs.1billion. For selling fuel below the cost price NOC has been incurring huge losses. The price of fuel has been increasing sharply around the world. Nepal buys fuel from Indian Oil Corporation. Because of soaring fuel price the current loss of NOC stands at Rs.1.78billion. More over, NOC’s outstanding dues have already crossed Rs.14.44 billion. The organization has taken loans from the government, Employees Provident Fund and various commercial banks.
Last time, Nepal Government proposed a price hike on the fuel a serious protest started all over Nepal. This time, the people have no other option but to accept the high oil price. Creating another political instability would further worsen the situation. In addition, Nepal government should go for alternative source of energy.
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The Himalayan Times
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