The debate over fuel pricing surfaced when Nepal Oil Corporation (NOC) top brass and senior government officials, who were called to explain reasons behind continued short supply of liquefied petroleum gas (LPG) and diesel, tied up its future supply capacity with price deregulation. [break]
If that is not possible, the corporation officials asked the lawmakers to push the government to provide it around Rs 1.5 billion every month if they wanted sufficient imports and maintain normal supply.
Commenting on the statement, some of the lawmaker said the current practice of squeezing the prices in the name of relieving the poor was simply unsustainable.
“We all (politicians) know that we simply lack the capacity to provide Rs 18 billion worth of annual subsidy to cushion petroleum consumers. Still if we did not act sensibly and open the prices, we will not only doom the economy but also continue to leave consumers in scarcity as they are facing now,” said Bijaya Paudel, lawmaker from CPN UML.
He even appealed other lawmakers in the committee and the parliament to refrain themselves from the greed of ´so called popularity´. His opinion was unless the government opened the prices and invited private players, it will never be able to assure consumers on uninterrupted fuel supply and quality of products.
“Can the people be relieved if the government turned bankrupt? Of course not! As a group working for overall betterment of the country and people, political parties must shed the temptation for so called popularity and oppose the resistance against reforms,” said Paudel.
But Narayan Khadka of Nepali Congress did not agree with Paudel.
His opinion was as the country is presently in political transition and struggling to fulfill promises made to people like conclusion of peace process and constitution drafting, the time was not right to decide on such a major policy departure.
“It will add cost on the people, disenchanting them further. That can affect overall political stability as well. Hence, the government must arrange fund from all available sources and finance imports,” said Khadka, opposing the idea of price deregulation for at least next 6 months.
During the meeting, NOC Acting Managing Director Suresh Kumar Agrawal apprised the lawmakers that the corporation was immediately in need of financial support to continue fuel import in desired volume.
“Indian Oil Corporation (IOC), the sole supplier, is already pressing us to disclose how much will we pay in the remaining 3rd and 4th installments of this month. We are facing a cash shortfall of Rs 1.34 billion. Unless we arrange that, it (IOC) can slash the supply,” said Agrawal.
Finance Secretary Krishna Hari Baskota said Ministry of Finance, which so far pledged loans of Rs 10.74 billions and arranged loans of Rs 12.43 billion from different financial institutions, said the government has no option but to bail out the corporation, as it cannot leave consumers in scarcity.
“But crucial question is how long can we manage the sensitive oil sector in this fashion?” said Baskota, pushing for opening petroleum prices in line with the international trend.
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