NOC overcharging airline companies on ATF

KATHMANDU, Feb 10: In yet another instance of anti-consumer activity, Nepal Oil Corporation (NOC) has been found taking a hefty profit on Aviation Turbine Fuel (ATF).

Though cost of ATF supplied by Indian Oil Corporation (IOC) is just Rs 118 per liter, NOC has been selling ATF to airlines at Rs 164.8 liter. NOC had increased price of ATF to Rs 164.8 from Rs 118 per liter on November 9. While raising the price, NOC had stated that price adjustment was necessary to recover losses that it incurred while importing ATF from different other sources during fuel crisis emanating from Tarai unrest and Indian blockade. NOC had allowed Nepal Airlines Corporation (NAC) and private firm Petrolimex to import ATF during the crisis.

NOC, however, has not reduced price of ATF even though it has already been a month since NAC and Petrolimex stopped importing ATF. While NAC imported ATF for its own consumption and supplied surplus fuel to NOC, Petrolimex had won the contract to supply ATF. In case of Petrolimex, NOC itself opened Letter of Credit (LC) worth Rs 500 million to import ATF.“

"We have not reduced price of ATF as we are yet to recover loss that we incurred while importing ATF through NAC and Petrolimex. Also we have not yet cleared out ATF stock imported by these two fir”s," a senior NOC official told Republica.

According to the official, almost 500 KL of ATF imported by these two firms is yet to be sold. The official said the price will be reduced only after the ATF in stock is sold out.

Petrolimex and NAC sold 3,000 KL and 1,574 KL of ATF, respectively, to NOC. Though NOC officials that they still have 500 KL of ATF imported by NAC and Petrolimex in stock, airline operators said they are still facing shortage of ATF.

Though there might be some logic behind NOC's decision to increase price of ATF to Rs 164.8 per liter during crisis, its reluctance to slash price, when its procurement cost has dropped significantly, is an act of black-market.

According to NOC, IOC supplied 140 KL and 240 KL of ATF from Raxaul depot alone on Monday and Tuesday, respectively. Despite this, NOC is in no mood of reducing price of ATF anytime soon, according to NOC Spokesperson Mukunda Ghimire.

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