Birat Petroleum cancels controversial supply deal

- Post Report, Kathmandu
The petroleum company had run into controversy following reports that the prices quoted by it were way high

Nov 9, 2015-Birat Petroleum, a private company that was supposed to supply petroleum products to Nepal Oil Corporation (NOC), has cancelled the deal with the state-owned enterprise. Birat Petroleum said on Sunday that it has ‘unilaterally’ called off the deal with NOC.

The petroleum company had run into controversy following reports that the prices quoted by it were way high. In addition, questions had been raised against the company over its controversial past.

As per the contract signed with Birat Petroleum, the private entity was supposed to import petroleum products from Bharat Petroleum depots in Guwahati, Assam and supply to NOC. Birat Petroleum is owned by Arjun Chhetri, a Sikkim-based supplier.

NOC Managing Director Gopal Bahadur Khadka too was accused of granting the contract unilaterally - even without carrying out preliminary assessment of the company and the prices it had proposed.  

Birat Petroleum had proposed to supply petrol at Rs 198 per litre and diesel at Rs 187 per litre from Siliguri, India. The prices proposed by the company, according to NOC officials, were much higher than those proposed by other bidders. Petrol is priced at INR 66.11 (Rs 105.776) per litre in Siliguri. According to NOC officials, under normal circumstances, petrol can be made available in Nepal at Rs 106 per litre. But amid Birat Petroleum’s claim that it called off the deal with NOC, the state oil monopoly has maintained that it invalidated the contract after Birat Petroleum failed to supply petroleum products by the deadline.

NOC Spokesperson Mukunda Ghimire said NOC had awarded the contract to Birat Petroleum on the condition that the company would supply petroleum products within two weeks. “Despite extension of the deadline, Birat Petroleum failed to supply fuel on time,” he said.

NOC three years ago had blacklisted Birat Petroleum after it found that the company had tried to cheat the state-owned enterprise by supplying adulterated petroleum products.

A high level investigation committee formed under Lawmaker Bhim Acharya had earlier recommended that the government scrap Birat Petroleum’s contract with NOC.

The parliamentary committee on Industry, Commerce and Consumer Welfare Protection also had raised questions about the contract. Citing irregularities, the parliamentary Public Accounts Committee on Friday had sought details of all the applicants from NOC.

NOC had also provided Rs 200 million to Birat Petroleum against its bank guarantee. According to NOC officials, the company has returned the amount.

Published: 09-11-2015 08:47

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