The Special Court on Thursday convicted 17 persons, including three senior officials of Nepal Oil Corporation (NOC), of corruption in the four-year-old petroleum scam at Bhalwari Depot of NOC.

The joint bench of the Special Court Chairman Baburam Regmi and Members Dwarika Man Joshi and Pramod Kumar Shrestha Vaidya pronounced the verdict.

Special Court Spokesperson Nagendra Keshari Pokharel said the court has slapped one and a half year jail terms to NOC’s then officiating Regional Manager Nagendra Kurmi, Assistant Manager Dipendra Basnet and Rabin Kumar Rawat among 98 other accused of corruption. The court has ordered recovering the bail amount of Rs670,910 and equivalent amount in fines from the convicts.

The Special Court handed one-year prison terms to three tankers entrepreneurs involved in the petroleum theft, and three-month jail terms to other two transporters. Nine tanker operators received 15-day jail terms.

The convicts evaded tax worth Rs 1 million every day on petroleum imported through Bhairahawa customs while transporting fuel with the connivance of the NOC officials.

A joint team of National Vigilance Centre (NVC) and Rupandehi Police busted the petroleum theft four years ago. The team raided two petrol pumps and two warehouses in Padsari and Madauliya where they found 19 tankers stealing diesel. The consignment imported from Sunauli was supposed to reach NOC’s depot in Bhalwari. An NVC report said the convicts stole more than 1,000 litres of fuel everyday from each tanker.

NOC imports fuel from Indian Oil Corporation (IOC)’s depot in Baitalpur, India, to transport to its depot in Bhalwari.

The NOC generally issues purchase delivery order (PDO) to petroleum transporters to import fuel from India.

“Although the tankers receive fuel via computerised system in IOC’s depot in India, transporters tampered the seal to refill more quantity of fuel. However, the transporters paid the duty only for the legal volume they ferried from India,” according to a Rupandehi Police report three years ago. Customs officials were also involved in the fuel theft, police said.

The price of petrol in Indian market was then Rs74.02 per litre while the price in local market was Rs121.18 per litre. Taking into account VAT and other surcharges including interest rate for NOC’s outstanding dues, office expenses and shrinkage loss, the cost difference used to stand at Rs45 per litre at par.

Similarly, the price difference in diesel used to stand at Rs30 per litre between India and the local market. By evading customs duty of the additional quantity of fuel, the convicts profited from the price difference.

In the charge sheet submitted to the Special Court, truck driver Prem Prasad Bartaula confessed his involvement in fuel smuggling. “We used to add up to 1,153 litres in a tanker en route to Bhalwari depot,” said Bartaula who was arrested at Padsari while refilling the tanker.

NOC officials received up to Rs100,000 per individual for their complicity in the scam. The officials also made money using the temperature loss provision. NOC compensated transporters with shrinkage loss of 0.32-0.57 percent on fuel import.

Based on the provision, a 20,000-litre fuel tanker used to receive subsidies of up to 120 litres per truck. The transporters sprayed cold water on the tankers to avoid fuel loss due to heat and manipulated the transported quantity.