NOC plans big cut in fuel prices

- POST REPORT, Kathmandu
NOC plans big cut in fuel prices

Dec 18, 2014-

Nepal Oil Corporation (NOC) is planning a big cut in petrol and diesel prices after the fortnightly review on export prices forwarded by the Indian Oil Corporation (IOC) on Dec 15. As per the new price list, NOC’s monthly projected profit is likely to touch Rs 1 billion. The state-owned oil monopoly, however, has not divulged its projected profit.

IOC reviews export prices of petrol and diesel/kerosene every fortnightly, and of other products such aviation fuel and LPG on a monthly basis. Based on the IOC-sent rates, NOC revises the prices under the auto pricing mechanism. Petroleum dealers said the petrol price is expected to drop by at least Rs 5 per litre.

The working guideline on the auto pricing mechanism, which was introduced on September 28, allows the corporation to revise the prices when there is a minimum of two percent fluctuation in the cost of finished products.

Brent crude price rose 2 percent to above $62 a barrel on Thursday, extending a rebound from five-year lows this week, as oil’s six-month price rout forced energy firms to cut investments.

NOC Spokesperson Mukunda Ghimire said as the existing guideline allows them to revise the price when there is a minimum two percent fluctuation in the cost, Thursday’s meeting particularly focused on amending the guideline. “As there will be a big cut in petroleum price this time, we first need to amend the guideline.”

According to NOC, due to the absence of Commerce and Supplies Secretary Narayan Gopal Malego, who chairs the NOC board, fuel price revision was delayed. Sources said the prices would be revised only on Sunday.

Meanwhile, fuel shortages have reappeared in the valley since Wednesday, resulting in long queues at gas stations. Most of the valley petroleum pumps were closed on Thursday. NOC sources said dealers are reluctant to buy petroleum products amid reports that NOC is making a big cut in the prices this week.

Lilendra Pradhan, president of Nepal Petroleum Dealers’ Association, admitted the shortage have reappeared due to reports about NOC preparing to cut the prices. “Most of the petrol pumps are not willing to hold stock as they fear the reduction in prices could lead to losses,” he said.

Pradhan said some refuelling stations had purchased limited amount of oil, but were sold instantly. On Thursday, only 323kl of petrol and 465kl of diesel was supplied to the market by NOC’s Thankot depot. “If the prices are not revised immediately, the situation is likely to worsen further.”

Students seek transport fare revision

Students’ unions on Thursday submitted a joint memorandum to Prime Minister Sushil Koirala a revision to public transport fares in line with falling oil prices. The unions said the government failed to adjust the prices in line with the international market price despite the enforcement of the auto pricing mechanism. Responding to the students’ concerns, the prime minister said the ministry concerned has already been directed to adjust the prices.

Published: 19-12-2014 09:35

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