Disappointed with Nepal Oil Corporation (NOC) Managing Director Gopal Bahadur Khadka’s poor performance, the government is considering removing him from the post.

On Friday, the NOC board sought clarification from Khadka, questioning his ‘involvement in multiple cases of irregularities in fuel distribution’ in the wake of Indian blockade and his failure to ‘speed up the commercial deal to import fuel from China’.

“We have given him two days to clarify his position on the issues that have surfaced in the media,” said Minister for Commerce and Supplies Ganesh Man Pun. When asked whether the government would remove Khadka from his post, Minister Pun said, “Let’s see his clarification first.”

However, a senior aide to Prime Minister KP Oli said the government is holding ‘internal discussions’ regarding Khadka and ‘considering removing him for his non-cooperation’.

The erstwhile Sushil Koirala-led government had appointed Khadka as the managing director of state oil monopoly in January for a four-year term.

But the incumbent government has arrived at a conclusion that Khadka’s stay in the office could further complicate the fuel crisis under which the country is reeling due to the Indian blockade, according to government sources.

“The government is holding internal discussions on ways to remove Khadka,” said one of senior aides to Prime Minister Oli.

“(The government) is yet to decide whether to hand over Khadka a pink slip or strip him of his certain rights by restructuring the NOC board. The government, however, is certainly mulling over possible ways to limit Khadka’s role.”

•      Non-cooperation
•      Involvement in irregularities
•      Conduct unbecoming a managing director
•      Unilateral move of awarding contracts to blacklisted companies to import fuel
•      Distributing fuel to some Kathmandu-based private fuel stations   from Bhalbari Depot
•      Promoting black-marketeering

Underlining the need of a high-powered team in the state oil monopoly to cope with deepening fuel crisis, PM Oli has been suggested that he pick ‘a former bureaucrat with high integrity who is committed to resolving the fuel crisis’ as the head of NOC.

The government, which has prioritised diversifying trade and oil import following the blockade by India, is miffed at Khadka’s lackadaisical approach to planned commercial deal for importing fuel from China. “Instead of working to ease the crisis, he has exhibited conduct unbecoming a managing director,” said a source at the Prime Minister’s Office.

A framework agreement for commercial supply of petroleum products was signed between Nepal and China on October 28. Immediately after signing the agreement, China had provided 1.3 million litres of petrol to Nepal, which has already been transported. However, NOC is yet to formally sign a commercial deal with the northern neighbour.

NOC officials however say signing of the commercial deal has been delayed due to differences over tax issues. Nepali officials have requested China to waive tax but China is unwilling to oblige, citing lack of such policy, said the officials.

A high-level government team led by Shambhu Ghimire, Joint-secretary at the Ministry of Commerce and Supplies, which was supposed to leave for China last Friday, has cancelled the visit. A technical team of NOC is currently in China to discuss tax related issues. “We are still discussing tax related issues,” said Mukunda Ghimire, NOC spokesperson.

NOC MD Khadka earlier had run into controversy after he awarded contracts to import fuel to blacklisted private companies-Bhagwati Traders and Birat Petroleum.

MD Khadka had even released Rs 200 million as guarantee to Birat Petroleum for importing fuel after the government decided to involve private parties in fuel import following the blockade imposed by India. According to NOC sources, Khadka had unilaterally selected private firms, without meeting the official procedure.

Complaints were registered at the ministry against MD Khadka for distributing fuel to some Kathmandu-based private pumps from Bhalbari Depot of Rupandehi. The parliamentary Public Accounts Committee had also accused Khadka of promoting black-marketing and monopoly in fuel distribution.