NOC, pvt companies reach fuel supply deal

- Rajesh Khanal, Kathmandu
However, the NOC has not fixed the price ceiling for the companies, the source added. This would allow a room to manipulate fuel prices

Nov 5, 2015-The Nepal Oil Corporation (NOC) has signed contracts with two private companies—Birat Petroleum and Petromax Nepal—to supply petroleum products to the state-owned oil company. The corporation has also provided ‘no objection letter’ to nine others for the purpose. 

While the NOC will buy fuel from the contracted companies, the corporation said it would also consider purchasing oil from the companies getting no objection letter based on the price and quality they offer.

As many as 22 companies had applied to the NOC for temporary fuel supply after India substantially curtailed supply of petroleum products to Nepal.

Companies obtaining the NOC no objection letter are Otex, Sherpa Outdoor, Orange Trade, Ohm Shiva Petro, Sai Ram Suppliers, Himalayan Gas and Petroleum, Global Alliance, Las World Trading and Blue Lotus. 

An NOC official said Birat Petroleum and Petromax Nepal were in the process of opening letter of credit. Birat Petroleum is owned by Arjun Chhetri, a Sikkim based supplier, while Petromax Nepal belongs to Pradeep Rana, who is said to be a close relative of former Prime Minister Sher Bahadur Deuba. 

While Birat Petroleum has been allowed to import petrol and diesel, Petromax Nepal has been awarded a contract to provide aviation turbine fuel (ATF). The two companies are said to have proposed to supply petroleum to the NOC at a price higher than the prevailing market rate, an NOC source said. 

Petromax had proposed to supply ATF at Rs212 per litre, which is Rs5-7 higher than the rate provided by the Nepal Airlines Corporation (NAC). A few weeks ago, the NOC had allowed the NAC to supply the ATF. The NAC has been importing ATF from Kolkata since. 

The NOC allowed Petromax to supply ATF as the fuel supplied by the NAC was insufficient to meet the domestic 

demand, the NOC source said. The daily demand for ATF stands at 70 kilolitres. “Although NAC was told to import 

46kl of ATF a day, it has been importing only 25 kl on average,” said the source, adding that Petromax had also committed to supply 1,000-1,200kl of kerosene a day. However, the NOC has not fixed the price ceiling for both the companies, the source added, “This would allow a room to manipulate fuel prices.” 

Birat Petroleum will be importing petroleum products from Bharat Petroleum depots in Assam/Guwahati. 

A few weeks ago, the government gave a go ahead to the private companies to import and sell petroleum products in the local market. 

Published: 05-11-2015 08:42

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