Even as Nepal has signed an agreement with China to import upto a third of its fuel needs, the Chinese side has told Nepal’s minister that there is going to be “no ceiling” on the quantity China can supply should Nepal request.

Minister for Commerce and Supplies Ganesh Man Pun, who returned home on Tuesday from Beijing, said China gave such assurance during his meeting with Chinese officials. Nepal, which has so far been dependent on India for its fuel needs, has sought to import certain portion of the country’s petroleum requirement from China after New Delhi curtailed fuel supplies.

On October 28, Nepal Oil Corporation (NOC) reached a framework agreement with its Chinese counterpart PetroChina on commercial import of fuel. The arrival of petroleum products from China in early November as part of Chinese emergency grant broke the 40-year monopoly enjoyed by the Indian Oil Corporation. With the shipment of 322,000 litres on Wednesday, all of 1.3 million litres of petrol provided by China has arrived in Kathmandu. A Nepali delegation is scheduled to visit China on Friday for a detailed commercial deal to ensure a regular flow of fuel from China, officials said.

As the price of Chinese fuel remains a big concern due to a longer distance and difficult terrain, Nepal has requested the Chinese side for a tax waiver to avoid double taxation. “We have asked them to waive taxes on fuel to be exported to Nepal. They have assured us that they to consider our request,” Pun said, adding that should China decide to exempt tax, fuel imported from China will be available almost at the same price as that of India.

The Chinese side has also expressed readiness to build necessary infrastructure as part of joint project, the minister said. The two major conduits with China—Kathmandu-Rasuwagadhi and Kathmandu-Tatopani—were damaged by the April 25 earthquake. Only the Rasuwagadhi route is operational now. With China planning to extend its rail network to Kerung by 2020, Pun said that it would help bring Chinese fuel through a pipeline along the railway line. The minister also said the government would construct storage plants in Betrawati of Rasuwa district and Panchkhal of Kavrepalanchok district in the long run.