On November 1, the corporation had announced that it could suffer a loss of Rs 314 million during the month, citing the then import rates issued by the Indian Oil Corporation (IOC).[break]
But fresh pricing issued by IOC on Friday shows that NOC´s loss on diesel has decreased further by Rs 1.96 per liter while profit on petrol has widened by Rs 1.27 compared to November 1 import rates.
With the change, the corporation´s loss on diesel, which is retailed in Kathmandu at Rs 97 per liter, now stands at Rs 1.19 per liter. Likewise, its profit on a liter of petrol, which is sold at Rs 125 per liter, stands at Rs 13.19 per liter.
Going by the bilaterally agreed arrangement, IOC has not effected any changes in prices for kerosene, aviation fuel and liquefied petroleum gas (LPG) in the mid-month pricing.
As a result, officials said NOC would continue to earn a profit of Rs 10.77 on a liter of kerosene, Rs 23.19 on a liter of aviation fuel supplied to domestic flight operators and Rs 26.15 per liter retailed to international flights, over the second half of this month.
Its loss on LPG would also continue to remain at Rs 508.13 per cylinder (of 14.2 kgs) in November.
Officials at the corporation expressed relief over the drop in import rates and shrinking loss margin.
NOC officials said that as the government has continued to cite the festive season and political uncertainty to ignore a proposal to adjust prices on a period basis, the drop in loss is solely due to the drop in international crude rates.
Thanks to that, they said, the corporation this month will find its loss shrink by 75 percent compared to October. In October, NOC announced a monthly loss of Rs 750 million.
The monthly profit-loss estimates also show that LPG alone is causing NOC well over 83 percent of its total loss, with diesel accounting for the rest.
Given that LPG is used largely by middle and high-income families along with commercial ventures like hotels, restaurants and factories, experts have been tagging the government´s bid to squeeze its price a gross waste of state resources.
They have also been urging the government to adjust LPG rates, albeit gradually, to bridge the export-retail price gap. However, as students and political groups have been resisting such change, the government has ignored their suggestions.
Instead, NOC has announced it is rationalizing the LPG loss by introducing dual pricing, making it more expensive for commercial consumers. But it has repeatedly deferred implementation of the scheme, amid protests from LPG bottlers and dealers.
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