Presently, the IOC has larger kerosene supply points at the depot, whereas Nepal´s import of this cheaper household fuel has been declining. On the other hand, its consumption of diesel and petrol has more than doubled, whereas the IOC has limited capacity to pump them out.
Nepal Oil Corporation (NOC) asked its Indian counterpart to increase diesel supply bays, even if doing so called for a reduction of kerosene terminals, in order to import more industrial fuel and better manage its inventory.
"IOC agreed to our request positively during the bilateral petroleum review meeting in Mumbai held this week," said Umesh Dahal, deputy managing director of the corporation.
The two sides have decided to conduct a depot inspection together first, then make a decision on how the diesel terminals could be developed to better cater to Nepal´s needs, he told myrepublica.com.
The IOC has also agreed to supply fuel to Nepal from its Siliguri depot within two months. To start with, the IOC said it would be supplying aviation fuel, kerosene and furnace oil from the depot.
Nepal asked the IOC to supply fuel from Siliguri as the depot is closer than the Barauni refinery where Nepal sources fuel for eastern parts of the country.
"This will reduce time and also the cost," said a NOC official, who elaborated that it would also support the corporation in conveniently operating the new depot it plans to establish in Jhapa to supply fuel to Ilam and other eastern parts of the country. The IOC had earlier rejected the request.
The IOC, however, refused the NOC´s request to switch to a fortnightly payment system for the fuel imports, saying it still doubts the corporation´s financial state, especially when international prices start to soar.
Although the fortnightly payment system goes along with the bilateral payment agreement the two sides have signed, the IOC has strictly enforced a weekly payment system for the past two years, particularly after the NOC started to default in its payments.
According to a source, the IOC raised concern mainly over receiving payments on time if international prices exceeded the domestic pricing structure in Nepal.
The sides also discussed issues such as constructing a Raxaul-Amlekhgunj pipeline system under joint investment, extending technical support to Nepal for depot automation and modernization, and setting up a liquefied petroleum gas (LPG) bottling plant.
It was agreed both sides would work together on all projects discussed, the IOC confirming it would send three separate technical teams to start work.
"The teams will visit Nepal soon," said Dahal. He stated that the team responsible for the pipeline would visit the site along the area proposed for laying the 40-kilometer pipeline down, and decide on the most feasible way to initiate a study into the development of a detailed project report for the pipeline project.
Among others, the team supporting the NOC´s depot automation and modernization would visit major depots of the corporation and make appropriate suggestions to the NOC on how to move ahead.
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