Print Edition - 2016-12-23 | MONEY
Ministry, NOC told to roll back fuel price hike
Lawmakers say the oil monopoly did not follow due procedures while taking the decision
Dec 23, 2016-A sub-committee of the Parliamentary Committee on Industry, Commerce and Consumer Welfare Protection on Thursday directed the Supplies Ministry and Nepal Oil Corporation (NOC) to roll back the latest hike in petroleum prices, stating the oil monopoly did not follow due procedures while taking the decision.
Lawmakers said such decisions taken in haste adversely affect consumers.Last Monday, NOC jacked up petrol and diesel prices by Rs4.50 per litre each. The price hike comes at the time when NOC has been enjoying handsome profits. With the latest price revision, NOC’s monthly projected profit has jumped to Rs280 million.
NOC Managing Director Gopal Bahadur Khadka told the sub-committee they were compelled to increase the price to check possible smuggling of petroleum products to India. “As petroleum prices in
India are higher by up to Rs20 per litre, chances of smuggling are high,” said Khadka. But the committee members rejected Khadka’s
Sudarshan Khadka, secretary of the sub-committee, said NOC’s move to increase price was not justifiable and it was against the automated pricing system. “The automated pricing system guideline 2014 bars NOC from raising price more than 2 percent at a time,” he said. “However, last Monday’s price hike was more than 4 percent.”
Under the guideline, NOC has set up a price stabilising fund in order to cushion the shock of abnormal price hikes in the international market. The guideline enables NOC to compensate 50 percent amount of the possible price hike through the fund, while the rest could be passed on to the consumers through price hike. The corporation has collected Rs2.83 billion in the fund.
“With all these options, it is not justifiable to pass on all the burden to consumers,” said Secretary Khadka.
Lawmaker Chandra Maharjan criticised the government for its failure to protect consumers. “Consumers are suffering in all areas, whether it is petroleum products, telecommunication or drinking water,” Maharjan said.
Subhash Chandra Thakuri, coordinator of the sub-committee, said they were not convinced by NOC’s justification. “Therefore, NOC should roll back the price hike.”
Meanwhile, an inspection carried out by the Supplies Ministry has found several vehicles with Indian licence plates refuelling at pumps in Nepal, while some traders based at the Nepal-India border points were found illegally supplying petroleum products in small vessels to India.
The market monitoring team led by the ministry’s Spokesperson Surya Prasad Shrestha had last week carried out the checks in bordering areas of Banke, Bardia, Kailali and Kanchanpur. “No substantial amount of petroleum products is being smuggled to India,” according to its report.
Published: 23-12-2016 09:27