Plan to sign petro deal with China on the back burner

Officials say improved supply from India has delayed the plan
KATHMANDU, Feb 2: Nepal's plan to import petroleum products from China by signing a commercial deal is losing steam, as the government seems to have put the agenda on the backburner following improved supply from India.

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Indian Oil Corporation (IOC), which supplied merely 15 percent of Nepal's petroleum demand in the early months of the blockade which began in September, is currently supplying nearly 45 percent of Nepal's fuel demand.

“Though the government, couple of months ago, had put commercial agreement to import petroleum products from China in priority, discussion on the issue is very rare these days,” a senior official of Ministry of Supplies (MoS) told Republica, requesting anonymity. “This is probably because supply from India is increasing gradually and no one wants to engage themselves in the hassle of purchasing fuel from the northern neighbor.”

The government is slowly sidelining the issue after Deputy Prime Minister and Foreign Minister Kamal Thapa returned from his China visit in December. Sources say it was agreed that the two sides will ink the agreement during Prime Minister KP Oli's visit to China. However, Oli's visit has yet to be finalized.

Officials also say the issue got sidelined also because of the government's decision to split Ministry of Commerce and Supplies (MoCS) into Ministry of Commerce (MoC) and Ministry of Supplies (MoS). Officials of both the ministries told Republica that the split has created confusion among officials regarding their roles and responsibilities.

Deepak Baral, director of Nepal Oil Corporation (NOC), said the issue is lingering at the government level. “As the agreement has to be signed at the government level, NOC has nothing to do with the delay,” said Baral.

Baral told Republica that IOC, at present, is supply around 45 percent of the country's petroleum demand.

The government, surprisingly, has not shown any willingness to transport fuel grants announced by China. Beijing, during Deputy PM Thapa's China visit, had announced to provide Nepal 1.4 million liters of fuel in grants.

NOC has not begun process to receive the grants citing reasons like extreme cold in the border point.  

Earlier in October, China had given Nepal 1.3 million liters of petrol in grants.