The Parliamentary Committee on Industry, Commerce and Consumer Welfare has directed the Ministry of Commerce and Supplies (MoCS) to intensify diplomatic efforts to resolve tax-related issues with China to ensure early import of Chinese fuel.

A technical team of Nepal Oil Corporation recently held talks with PetroChina in Beijing on importing petroleum products, but the issues related to tax is said to have delayed a commercial deal.

During a meeting of the House committee on Sunday, lawmakers expressed concerns over the slow progress in importing fuel from China.

The ministry has written to its Chinese counterpart, seeking a tax waiver on petroleum imports after the Chinese side insisted on a government-level agreement over the issue.

At the meeting, NOC Managing Director Gopal Khadka said the ministry’s prompt action was required to ensure early conclusion of the import agreement. He said NOC could import 50 percent of the valley’s fuel demand from China. “Provided the agreement is reached with China, we can import 450KL of petroleum from China on a daily basis,” he said.

The valley demands 900KL of petroleum products, including 350KL of petrol and 450KL of diesel, every day.

After India imposed a trade blockade on Nepal, resulting in an acute petroleum shortage, the government has been seeking to import fuel from China. It signed a framework agreement with the northern neighbour on October 28.

Khadka said the NOC could import only 150KL of fuel through the Rasuwagadhi border point due to the tough terrain along the trade route. Stating that it was feasible to import 300KL through the Tatopani border point, he underscored the need for building storage plants in Nuwakot and Pachkhal.

“If the plan to import fuel from China is to materialise, the government has to manage required tankers to ship petroleum products from China’s Shigatse,” he added.

NOC Director Deepak Baral, who was a member of technical team that visited China, said the major obstacles for importing fuel from China through Rasuwagadhi were difficult terrain and low temperature on the Chinese side. However, there are such problems in importing fuel through Tatopani.

The Parliamentary committee also asked the ministry to speed up efforts to open the Tatopani border, besides other entry points for bilateral trading with China.

Meanwhile, the House panel directed the Department of Commerce and Supply Management to effectively monitor the soaring prices of daily essentials, including cooking oil.

It committee also asked NOC to ensure an effective fuel distribution system.