Though it had earlier announced to adjust fuel prices within a couple of days, a meeting of Prime Minister Dr Baburam Bhattarai with Minister for Commerce and Supplies Lekh Raj Bhatta Pun and Finance Minister Barsha Man held on Friday chose to defer it yet again.[break]
“We are providing the money to the NOC to make up for the loss the state-owned oil monopoly has been incurring every month,” Pun said after the meeting. As always reiterated by the past ministers, he also added the government would soon take decision to fix the problems related with oil pricing.
The government has already extended Rs 3 billion in loans to the NOC over the first four months of this fiscal year. The fresh loans will take that up to Rs 4.50 billion.
Moreover, the apathy of the government to adjust domestic prices in line with the international trend has already subjected the cash-strapped NOC to a debt of around Rs 20 billion. As oil loss has been consistently eating up the scarce state resources that should have gone for development purposes, Ministry of Finance has been pushing the government to manage the NOC´s fund flow by making consumers pay for what the product costs.
However, the government has been turning a deaf ear to such calls, mainly as such unpopular decision draws criticism of general consumers, student unions and political parties.
“Fresh loans will help us manage the imports for now. But how will we manage the fund yet again next month?” questioned Commerce and Supplies Secretary Purushottam Ojha, stating that NOC´s loss presently stands at Rs 1.26 billion a month and the loans provided by the government will be burnt in a month.
Amid rise in crude prices, which has rendered the petroleum products expensive, the corporation has been pushing the government to work out a more sustainable solution to enable it manage its finances. Clearly, adjusting the retail rates in line with the international trend by convincing the people to pay the price that the fuel costs is the most sustainable solution.
“If leaders perceive it is not appropriate decision to take at this juncture of political transition, the government should cut taxes and hike the price by a smaller margin -- distributing the cost fairly between the government and consumers,” Ojha added.
Minister Bhatta too had made similar arguments when he met with the PM in the morning. However, Pun protested the idea of reducing or waiving off tax on petroleum products, stating that it will badly disfigure revenue targets, thereby affecting developmental allocations.
PM Bhattarai, on the other hand, asked the two ministers to jointly work out the most feasible mechanism so that the long-running problems of the country´s petroleum sector could be permanently sorted out.
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