Prices not reduced as per falling international rates
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KATHMANDU, Jan 14 : Debt-ridden Nepal Oil Corporation (NOC), despite accumulated losses, is distributing Rs 900 million in bonuses to its employees.
Instead of reducing the price of petroleum products in line with plummeting international prices, the state oil monopoly at its board meeting on Wednesday proposed to distribute bonuses, according to a source at NOC.
The source confirmed that the NOC board discussed a proposal to distribute bonuses worth Rs 900 million. “The board has not yet decided on the bonus distribution, though,” the source claimed.
A rough calculation shows that the NOC bonus to its 611 staff -- 89 on contract and 522 permanent -- works out at Rs 1.47 million each on average.
Instead of reducing fuel prices to give a respite to the crisis-hit customers and paying off the Rs 12 billion in dues that it owes the government, NOC has been preparing to distribute such a huge bonus.
The automatic pricing mechanism adopted by the government in September 2014 makes it mandatory for NOC to revise fuel prices every fortnight. But there has been no revision since September although the price of crude has been falling steadily in the international market to around US$30 per barrel now, the lowest since the last 12 years.
According to petroleum experts, NOC should have reduced the price of petrol and diesel by at least Rs 20 per liter in line with the current crude prices in the international market.
Currently, petrol costs Rs 104 per liter and diesel Rs 82. Had NOC prices reflected the plummeting crude prices, Nepali consumers would have enjoyed petrol and diesel at Rs 84 and Rs 62 per liter respectively.
The technically bankrupt NOC, which has been dragged into a number of controversies of late, is neglecting the interest of consumers and focusing solely on its own benefit.
Moreover, NOC is also acting against the law in keeping a huge profit margin in petrol, kerosene and aviation turbine fuel (ATF). While NOC enjoys a Rs 12.66 per liter profit in petrol and Rs 19.84 per liter in kerosene, it also rakes in a profit margin of Rs 61.61 per liter in ATF. The Black Marketing Act, 1975 allows a business firm to keep a profit margin of a maximum of 20 percent only.
According to NOC, it has been recording Rs 769.30 million in monthly profit of late. However, the corporation has neither reduced prices nor smoothened the supply, citing the Indian blockade. Consumers have been forced to pay Rs 200 per litre in the black market for a litre of petrol.
