Oil import dwindles, NOC pushes for earlier issue of loans
KATHMANDU, June 2: Import of petroleum products has gone down sharply since Friday after debt-ridden Nepal Oil Corporation (NOC) failed to pay enough to the Indian supplier to secure normal volume of fuel.
According to NOC, the state-owned petroleum import monopolist received just 700 kiloliters (KL) of petroleum products from Raxaul, the largest import point through which the country sources some three-fourth of the national oil demand.
The volume was less than one-third of what NOC was receiving daily from the Raxaul depot of the Indian Oil Corporation (IOC) till Thursday. The import was no better on Saturday.
“The import volume has plummeted yet again. IOC has slashed the supplies as we could neither send enough money to finance import in normal volume nor could clear its outstanding dues,” said NOC Spokesperson Mukunda Dhungel.
The corporation had failed to secure normal imports last month as well, but managed to pull through the adversity after the government lent it Rs 500 million, which it instantly transferred to the IOC.
Fresh data of the corporation show its outstanding dues to settle to the Indian supplier has touched Rs 3.2 billion (IRs 2 billion). “Of that unsettled accounts, Rs 1.55 billion had accrued from excess export over payments made in April. Rest of the dues amount were freshly created in May,” added Dhungel.
The shortfall in import would not result in any adverse impact on fuel distribution for the time being said officials. However, they noted the supply would eventually hurt if the corporation did not rapidly get the loans from Citizens Investment Trust (CIT) and Employees Provident Fund (EPF) as arranged by the government.
The government last week had decided to provide Rs 1.6 billion in loans to the corporation, including Rs 1 billion from CIT and Rs 600 million from EPF, for financing import.
While the Ministry of Finance has already released Rs 500 million, the two financial institutions have lingered pledging the loans even after two weeks of decision.
“We are constantly following up. But they say their board has not taken any decision on it yet,” said Dhungel.
Sources at both EPF and CIT, meanwhile, said that their institutions were not positive towards pledging further loans to the NOC, which is already submerged in debt of well over Rs 23.17 billion.
EPF has already pledged loans of Rs 6.40 billion to NOC, of which Rs 1.50 billion were issued earlier this year. Likewise, CIT´s loans to NOC too stands at Rs 4.13 billion, of which Rs 3 billion was pledged this year.
But despite their reluctance, EPF and CIT are expected to issue fresh loans to the corporation soon as they do not wish to face the pressure that government might exert on them.