Money

Gas stations launch protest programme

- Post Report, Kathmandu

Aug 11, 2017-

Gasoline stations have launched a protest by stopping to receive deliveries of fuel over a dispute with Nepal Oil Corporation (NOC) regarding compensation for shrinkage loss. 

Pumps launched their protest without waiting for a probe report to be implemented, leading panicked motorists to form long queues in front of filling stations. 

Private pumps stopped buying petrol from NOC on Thursday, one day after a study report conducted by a probe team led by NOC’s Acting Director Deepak Baral was finalised. The study team included representatives from the Nepal Bureau of Standards and Metrology (NBSM), consumers’ right organisations and fuel dealers. 

Shrinkage loss refers to gasoline lost due to shrinkage and evaporation. As per NOC, shrinkage loss occurs in fuel shipments when they are transported from warm locations to cooler places. 

Speaking at a meeting of the sub-committee of the parliamentary Industry, Commerce and Consumer Welfare Committee on Thursday, Baral said the study revealed that there was a shrinkage loss of 0.693 percent (7 litres per 1,000 litres) in diesel. “Similarly, the loss is 1.542 percent (15 litres per 1,000 litres) in petrol,” he said. 

However, NOC has been compensating fuel sellers for technical loss at the rate of 6 litres per 1,000 litres for diesel and 8.75 litres per 1,000 litres for petrol. 

The study report has urged NOC to revise the compensation amount for petrol for the next three months. It recommended continuing the study for another six months. 

“Based on the variation in shrinkage that could take place due to changes in weather conditions and topographical structures, the team has recommended extending the study for another six months,” Baral said. 

The team has also recommended that the storage tanks of gasoline dealers be calibrated in the next nine months. However, filling stations suspended sales right after the finalisation of the report. They said they would stop buying diesel from Sunday and shut down completely from Tuesday. Lilendra Prasad Pradhan, president of the Nepal Petroleum Dealers’ Association, said they were compelled to launch the protest after their demand remained unheard for the last nine months. He sought reform in the measurement system implemented by NOC. 

Pradhan also expressed doubts about the validity of the calibration carried out by the private sector. “When NOC cannot confirm its own calibration procedures, the measurement process conducted by petrol pumps can be easily questioned.”

Consumer rights activists have blamed NOC for failing to adopt effective measures to control technical losses. “Had the state enterprise effectively adopted reform measures, technical losses could have been reduced to a large extent,” said Prem Lal Maharjan, president of the National Consumer Forum. 

According to Maharjan, six different studies carried out in the past had urged NOC to implement correction measures in its calibration system. “Lack of a calibration tower with the NBSM and lack of maintenance of devices such as the weighing bridge and flowing meter at NOC’s depot in Amlekhgunj are among the major causes of the problem,” Maharjan said. 

Maharjan said a mass-based calibration system should be implemented in Nepal as is done in other countries. “If we implement a mass-based calibration system instead of the existing volume-based measurement system, the problem can be resolved to a large extent,” he said. 

Published: 11-08-2017 08:48

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