KATHMANDU, June 11: Nepal Oil Corporation (NOC) that had curtailed the supply of petroleum products in the market by one-third over the past week has stepped up sales after its Indian supplier resumed normal export to Nepal.
“We supplied 307 kiloliters (KL) of petrol and 413 KL of diesel in the Kathmandu Valley on Monday,” said NOC Spokesperson Mukunda Dhungel.
Though the supply was better than what NOC was issuing every day over the past week, dealers said the quantity was still below the normal regular demand. As a result, queues of vehicles were seen in refilling stations on Monday as well.
“We are hopeful that the situation will turn better soon, as NOC has informed us that it will further increase the supply from Tuesday,” said Linendra Pradhan, president of Nepal Petroleum Dealers´ Association -- a body of petroleum retailers.
According to Pradhan, petrol scarcity will end if NOC pumped out 400 KL of petrol regularly for four to five days. However, he ruled out chances of diesel scarcity ending anytime soon.
“The volume of diesel distributed in the market is too low given the demand, which stands at well over 550 KL a day. We doubt NOC will increase diesel supply as it is incurring a loss of Rs 8.53 on a liter of diesel,” said Pradhan.
Short supply of fuel has been regularly troubling consumers since about a decade as the government has been neither adjusting retail rates nor promptly arranging fund to the debt-ridden corporation to plug loss, which has averaged at Rs 1 billion a month for the last nine months.
The latest spate of scarcity had erupted 10 days ago after IOC cut export by two-third, referring to ballooning outstanding dues that touched Rs 3.2 billion.
“However, it has stepped up the exports volume after the government arranged us Rs 3 billion to settle the outstanding bills,” said Dhungel.
According to NOC, it received 2,000 KL of petroleum products on Saturday as well as Monday from Raxaul -- the largest import point through which NOC fulfills some 75 percent of the national fossil fuel demand. Last week, it was receiving only about 700 KL a day from Raxaul.
Improvement in supply was seen after the government on Friday decided to provide yet another Rs 1.40 billion to NOC and also ordered Employees Provident Fund (EPF) and Citizens Investment Trust (CIT) to instantly provide another Rs 1.60 billion in loans to the corporation.
“Based on government´s instruction, EPF released us Rs 600 million on Sunday. We have already transferred the amount to the IOC,” said Dhungel. He said NOC will provide another Rs 700 million to the Indian supplier on Wednesday.
As for the loans of Rs 1.4 billion that the Ministry of Finance has promised, NOC officials are optimistic of getting the fund soon. “We will send that along with collections we have made so far to the IOC soon,” said Dhungel.
Once the payments are made, NOC says consumers will not suffer scarcity for the next one month. For scarcity to end forever, however, it adds the government will need to plug the gap between import and retail rates permanently.
Presently, the country is incurring oil loss of Rs 704.2 million a month.