Nepal Oil Corporation (NOC) has slashed the prices of petroleum products effective from Friday midnight.

The corporation has reduced Rs1.50 per litre on petrol, diesel and kerosene. The state-owned oil monopoly, however, has not revised the price of Liquefied Petroleum Gas (LPG)-also known as cooking gas.

As per the revised rates, petrol will now cost Rs100 per litre. Similarly, kerosene and diesel will cost Rs76 per litre each.  

NOC Spokesperson Sita Ram Pokharel said the fuel prices were revised in line with the price list sent by Indian Oil Corporation—NOC’s sole supplier. 

“The Indian supplier has revised the price based on the international oil price,” Pokharel said.

 According to Reuters, crude oil price dropped to 6-month low to $46.92 per barrel. Even with the price cuts, NOC will still earn a monthly profit of Rs760 million from the petroleum business.  

Despite adopting the auto pricing system in petroleum business, NOC has not been revising the prices in the domestic market line with the changing prices in the international market.

The state-owned enterprise has been showing the price difference at the Nepal-India border and assumes that lower prices in Nepal will promote fuel smuggling to Indian market.

According to Pokharel, diesel price in Nepal is cheaper by Rs19 per litre as compared to the price in the bordering Indian markets.

Similarly, NOC claims that petrol is cheaper by Rs11 per litre in Nepal. According to NOC’s annual report, it earned a profit of Rs19 billion in the last fiscal year. Profits are projected to reach Rs10 billion this fiscal year.