KATHMANDU, Nov 17: Nepal Oil Corporation (NOC) has raised the prices of diesel and kerosene by Rs 3 per liter each, effective from Tuesday. Consumers now onwards would need to pay Rs 58 for a liter of diesel as well as kerosene. [break]
NOC, however, has left the prices of petrol and liquefied petroleum gas (LPG), two other major fossil fuels, untouched. Petrol is priced at Rs 78 per liter, while a cylinder of LPG costs Rs 1,125 to consumers in the Valley.
"We raised the prices after the new pricing issued by the Indian Oil Corporation (IOC) increased import prices of petrol and diesel, further soaring our oil loss," Digambhar Jha, NOC chief, told myrepublica.com.
As the government had refrained from adjusting domestic oil prices fearing protests from political parties in opposition, NOC was incurring a loss of Rs 200 million in a month previously.
"The new pricing of IOC had further raised it to Rs 280 million a month," Jha said, adding that the latest adjustment has reduced the loss to Rs 150 million. Jha further stated that the price hike decision was taken after receiving nod of 22 political parties.
Going by the domestic oil prices, NOC is presently earning a profit of about Rs 2 on petrol and about Rs 7.50 on a liter of kerosene. It is, however, still suffering a loss of Rs 2.50 on a liter of diesel and Rs 163 on a cylinder (14.2 kgs) of LPG.
"The profit from petrol, kerosene and aviation fuel now almost balances the loss emanating from diesel," Jha stated.
Interestingly, NOC has refrained from plugging the loss it suffers from the LPG trade, although the same is consumed by relatively better off urban households. Of the total loss of Rs 150 million, the loss from LPG alone stands at Rs 140 million.
"This is very ironical policy situation. On one hand, we say LPG is consumed by relatively better off families, but on the other, the state is unnecessarily pledging a huge subsidy on the product," said a source.
Experts, too, have been urging the government to straighten out this wrong policy. However, the government has continued to turn deaf ears to such calls, fearing the rage that it would draw, mainly from the politically active students and other urban consumers.
The latest adjustment, nonetheless, has plugged the cross-border pricing gap that existed on diesel.
Previously, diesel in the Nepali side of the border was cheaper by Rs 2.25 per liter than in the Indian market on the other side. This was resulting to cross-border smuggling of the product from Nepal to India.
"The new price now has made diesel expensive in Nepal. This will check unwanted outflow of diesel, thereby reducing consumption to some extent as well," said Jha.
milan@myrepublica.com
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