NOC received the heat from the sole exporter of fuel to Nepal when a visiting high-level IOC team met with its top officials on Wednesday.[break]
Essar had approached the government and NOC last month to import fuel from it as well. If NOC said yes, it will break decades-long monopoly of IOC in the Nepali petroleum market. IOC presently exports fuel worth about Rs 50 billion a year to Nepal.
The IOC team, including Deputy General Manager (Commercials) from Mumbai and General Manager (Accounts) and accounting officer from IOC Kolkata, is in Nepal Nepal to reconcile the financial statements of the two business partners.
NOC Chief Digambar Jha, talking to Republica, said he had had meeting with the team, but refused to disclose its details.
However, sources close to NOC said that IOC DGM Rahul Bhardwaj, during the meeting, asked for reasons behind NOC showing interest to induct new supplier. He also sought clarification on NOC´s intent to divert the business away from IOC.
IOC has remained the sole exporter of fuel to Nepal for more than three decades. However, Nepal has not received adequate supplies from it of late due to various technical reasons. Moreover for fuel security and introducing reforms in the sector, experts have long been pushing the government to open the sector and induct new suppliers.
In this context, when top officials from Essar Group that operates the second largest petroleum refinery in India approached it, NOC had responded positively to their business proposal.
The NOC management had suggested them to forward specific business, technical and financial proposals, including prices, mode of delivery and technical specification of the products, so that NOC could discuss the matter with the higher authority.
During the meeting with Essar, NOC Chief Jha had even stated that they could instantly pledge it an order of much as 50 percent of its total diesel imports, if its price and product is competitive and if it is ready to supply fuel from bordering areas, among other conditions.
Since diesel makes 60 percent of NOC´s total business, Essar would instantly take away 30 percent of IOC business in Nepal, if NOC started business with Essar.
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