PAC seeks details of fuel import plan

  • Pvt firms in oil business
- Rajesh Khanal, Kathmandu

Nov 7, 2015-

The parliamentary Public Accounts Committee (PAC) has asked Nepal Oil Corporation to provide the details of its plans to import petroleum products through private companies after its deal with Birat Petroleum got embroiled in a controversy. The state-owned oil monopoly has got three days to submit the information.

Concerned by possible irregularities, the House panel asked for detailed information about the private companies that have applied to supply fuel and the agreements made with them.

Questions were raised after NOC awarded the contract to Birat Petroleum which had quoted a higher price. A total of 22 companies had submitted their bids.

Birat had proposed to supply petrol at Rs198 per litre and diesel at Rs187 per litre from Siliguri, India which, according to NOC officials, is higher than the prices quoted by many competitors.  

The local price of petrol in Siliguri is only IRs66.11 per litre. Adding all the taxes and other charges, petrol can be made available for only Rs106 per litre in a normal situation, according to the NOC.

Moreover, Birat Petroleum had been blacklisted by NOC three years ago after revelation that it had tried to supply adulterated gasoline. A high-level investigation committee formed under lawmaker Bhim Acharya then had recommended the government scrap the contract between the NOC and Birat.

PAC has asked NOC to explain the basis, reason and conditions of the agreement it considers when selecting private companies to supply fuel. The other details that the PAC has sought are the quality and prices that the prospective suppliers have proposed.

The state-owned importer has also been asked to report its supply plans, schedule, contract clauses and market price of the fuel imported by the firms. The committee has asked NOC to clarify if it has made advance payments to any company, and the reasons for doing so and the conditions stipulated. NOC Managing Director Gopal Khadka has been criticised for giving Rs200 million to Birat Petroleum.

Khadka defended his action by telling the parliamentary committee on Thursday that he had made the advance payment against a bank guarantee provided by the company.

Meanwhile, PAC Under-secretary Surendra Aryal said they had asked the NOC for a written clarification on suspicion that the private company that it had selected could have quoted an unusually high price.

According to him, the committee asked for a comparative chart of the prices quoted by all the applicants. “After assessing the written documents that NOC submits, we will call the concerned officials for further explanation if required,” he said. The House panel has also demanded a complete list of the bidders and their past history and current status.

NOC called for bids from private companies to supply fuel as the country has been in deep distress since India cut off oil shipments. PAC stepped in after it was revealed that NOC had awarded the contract to a blacklisted company. Khadka defended his decision saying that he had acted after the Cabinet gave the go-ahead to the NOC to immediately select a company to supply fuel considering the crisis.

Meanwhile, the parliamentary Industry, Commerce and Consumer Welfare Protection Committee on Thursday slammed NOC for awarding the contract to Birat Petroleum which it had once blacklisted.

Published: 07-11-2015 08:15

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