Nepal Oil Corporation (NOC) said that Petrolimex Nepal, a private firm that has been contracted to import fuel, was likely to start supplying aviation turbine fuel (ATF) this week.

According to the state-owned oil monopoly, the company has completed almost all the procedures in India to begin airlifting the fuel.

Petrolimex has reported that it has completed all the paperwork required by the civil aviation authorities in India, said NOC spokesperson Mukunda Ghimire. “The company has informed us that it will be providing the fuel to NOC shortly,” he said.

State-owned NOC had selected Birat Petroleum and Petrolimex Nepal from among the 22 companies that had applied to supply fuel in response to its call for expressions of interest.

Birat had been given the contract to supply petrol and diesel while Petrolimex had been awarded the contract to supply ATF. Birat subsequently pulled out of the contract amid a hail of criticism over its tainted past.

According to NOC, Petrolimex will be airlifting 20 kilolitres of aviation fuel in the first lot. Ghimire said the company had promised to provide 400 kilolitres to NOC daily. He added that NOC had opened a letter of credit for Rs500 million in the name of Petrolimex through Himalayan Bank.

“We have opened the account against the company’s bank guarantee so that it can begin importing fuel,” said Ghimire, adding that the bank would not release the funds until the company had delivered the fuel to NOC. The move has raised controversy as payment has been made to Petrolimex before the fuel has been imported.

Petrolimex, owned by Pradeep Rana, has pledged to provide the fuel at Rs170-180 per litre. It will be bringing the shipments from Lucknow, India. The company reportedly first approached Bangladesh and later Kolkata, India to buy the ATF.

Meanwhile, NOC said controversial Birat Petroleum had returned in full the advance payment of Rs200 million along with Rs800,000 in interest.

NOC had paid the money to the company for the supply of petroleum products. However, the corporation had been maintaining that it provided the funds to open a letter of credit account against a bank guarantee. Birat later withdrew from the deal.

NOC team leaves for China

A technical team of Nepal Oil Corporation (NOC) left for China on Monday to discuss taxes and other issues with PetroChina before signing a proposed commercial deal with the Chinese company.

NOC has already signed a memorandum of understanding with PetroChina to import one-third of Nepal’s oil requirement from the northern neighbour.

NOC Spokesperson Mukunda Ghimire confirmed that a two-member team headed by Acting Deputy Managing Director Sushil Bhattarai and Acting Director Deepak Baral had departed for Beijing. The delegation is expected to discuss local taxes, export duty and transport subsidy on the fuel Nepal envisages importing from China. The government had planned to send a high-level government team, but the visit was postponed as it first wanted to settle the tax issue over which there was confusion.