Rs 2.81b collected in Price Stabilization Fund lies idle

KATHMANDU, March 29: Nearly Rs 3 billion collected in Price Stabilization Fund, which was established by the government nearly two years ago to cushion consumers against hike in price of petroleum products, has not been of much use to consumers.

According to officials, Rs 2.81 billion has been collected in the fund so far. Consumers, who are paying high price for petroleum products despite significant drop in price of petroleum products in the international market, have not been able to get any benefit from the fund.The government had set up the fund in July 2014. Subsequently Nepal Oil Corporation (NOC) adopted automatic pricing mechanism, assuring consumers that it would adjust prices as per the international market rates.

While announcing the fund, the government had said that the fund will provide relief to consumers from hike in price of petroleum products. But no such thing has happened so far. Consumers are still paying higher price for petroleum products even though price in international market has fallen significantly.

NOC has been levying consumers 50 paisa per liter in petrol, 38 paisa per liter in diesel and kerosene, 50 paisa in Aviation Turbine Fuel (ATF) and Rs 7 per cylinder of Liquefied Petroleum (LP) gas. The amount is collected in Price Stabilization Fund.

Madhav Timalsina, president of Consumer Rights Investigation Forum (CRIF), said that NOC, despite being a public enterprise, is doing nothing for the well-being of consumers. "NOC has been keep huge profit margin on petroleum products which is against the norm of public enterprises," Timilsina said, lambasting the petroleum monopolist for not adjusting fuel prices in time.

NOC has been keeping profit of Rs 17.54 per liter profit in petrol, Rs 15.81 per liter in diesel, and Rs 29.46 per liter in ATF. It has also not adjusted price of petroleum products since February.

Officials of NOC argue that Price Stabilization Fund can be mobilized only if price of petroleum products changes by at least two percent. Claiming that NOC was adjusting fuel prices in a scientific manner, Mukunda Ghimire, spokesperson of NOC, said the fund will be used if petroleum prices increase by a higher margin.

Ghimire also said that NOC will adjust fuel price in April.

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