Worse was, the apathy siphoned away well over Rs 4 billion from the state coffer, supposed to be invested in crucial social sector and development programs as the government during the year doled out funds to finance imports, instead of taking rational decision.[break]
"We (NOC) imported a total of Rs 70 billion worth of petroleum products during the year, and unfortunately, low retail rates compared to import rates caused us suffer a net loss of about 8 percent," said NOC Spokesperson Mukunda Dhungel.
According annual average profit and loss figure for different petroleum products, the corporation suffered losses in all major products. The maximum loss came from diesel, followed by liquefied petroleum gas (LPG) and petrol.
As a result, the corporation has estimated its negative net worth to have crossed Rs 10 billion during the year. "Our outstanding loans liability too jumped to Rs 17.02 billion," said Dhungel.
Of the total outstanding loans, the corporation has loans due worth Rs 10.49 billion to the government. Its outstanding loans liability to Employees Provident Fund stands at Rs 4.90 billion, Citizens Investment Trust stands at Rs 1.13 billion, and Everest Bank at Rs 500 million.
During the year, the international price of oil jumped to as much as US$ 127 per barrel. Even though the government allowed it to adjust prices for six times, it was barred from raising the prices substantially, which was needed to plug in gaps on major loss making products diesel and LPG.
The government believed that raising the prices of these two products would leave inflationary impact, hurting general consumers, particularly as inflation during the year remained closed to double-digit.
As a result of such unscientific pricing management, it still suffers a net loss of Rs 7.14 per liter on diesel and Rs 297.97 on every cylinder (14.2 kgs) of LPG.
"Together, these products are still inflicting us a monthly loss of Rs 506 million," said Dhungel.
Amid such dismal financial outlook, the corporation has said it would against need an instant loan of Rs 750 million if it is to maintain stock and ensure normal supplies during the upcoming festival season of Dashain and Tihar.
In this connection, it recently pushed the government to pledge a fresh tranche of loans. However, after the Ministry of Finance denied such favors, Dhungel said the corporation is taking fresh initiatives to take loans from banks.
Officials blame the political leadership for not showing eagerness to address the pricing problems. So far, the state-administered ad hoc pricing mechanism, which is largely determined by the political interest of the government, has inflicted the country an oil loss of well over Rs 25 billion over the last eight years.
If the government did not take up pro-active role in dealing away with the problem, NOC cautions the country will face still more serious fiscal problems in days ahead, and urged the government to correct its behavior immediately.
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