Nepal Oil Corporation (NOC) has repaid Rs3.64 billion loans to the government, bringing down its debt burden to Rs4 billion.

Of its total loans of Rs36 billion as of fiscal year 2013-14, it owed Rs12.64 billion to the government and the rest to different banks and financial institutions. 

The corporation said its oil business has been making profits ever since it adopted the auto-pricing mechanism on September 29, 2014. 

NOC has been enjoying Rs660 million monthly profits. Based on its monthly projected profit, the oil monopoly is likely to clear its entire debt in the next eight to nine months.

The NOC, however, said international oil prices will determine their future profits. “We are not sure when the remaining dues will be cleared. It will depend on the international price,” said NOC Spokesperson Mukunda Ghimire, adding NOC has deposited Rs2.81 billion in its “price stabilisation fund”. 

Brent crude price fell to $27.67 a barrel last January, its lowest since 2003. 

NOC had announced a dramatic turnaround posting a profit of Rs18 billion in the last fiscal year after five straight years of losses. The last time NOC made a profit was in 2008-09. 

In August 2010, the company’s decision to distribute Rs198.8 million in bonuses to its employees from its profit of Rs3.31 billion for the fiscal year 2008-09 was struck down by the Commission for the Investigation of Abuse of Authority citing the Bonus Act which does not allow the distribution of bonuses by institutions that have huge debts and are facing a massive cumulative loss.

Again in January this year, despite accumulated losses, NOC provisioned Rs900 million bonus to its employees. However, the plan was foiled by the Finance Ministry.