“That rise in price has seriously jeopardized our loans-repayment capacity, and it has straightaway exerted pressure on us to revise our prices,” said Chief of the heavily-indebted NOC, Digambhar Jha.
Going by the corporation´s debt servicing commitment, it needs to pay back Rs 500 million in principle and Rs 50 million in interest to its lenders. Paying back that amount is going to prove even more difficult for the NOC, now that the price rise has created a shortfall of Rs 300 million in the corporations´ meeting the debt servicing liability.
But despite the problem´s looming on the horizon, Jha told myrepublica.com, the corporation would take a decision regarding the problem only after observing how the prices would move on June 15--the date when it will receive the next import rates from its Indian supplier.
The corporation had faced a shortfall of Rs 150 million in its loans repayment fund in May as well, as the prices of petrol and diesel inched up on May 16.
From the profits it reaped by fixing domestic prices at a higher level, the corporation has over the last six month served loans of Rs 4.59 billion to the government and financial institutions.
The corporation, which had technically gone bankrupt during the high oil price era that lasted for some four years, had outstanding loans worth Rs 15.96 billion to clear about six months ago.
Over this period, it paid about Rs 2 billion to the government, Rs 1.80 billion to banks, about Rs 700 million to the Citizens Investment Trust (CIT) and Rs 150 million to the Employees Provident Fund (EPF).
"Now our loans liability stands at over Rs 11 billion, including the Rs 8.16 billion we owe the government," said Jha.
The corporation had borrowed the money to finance petroleum imports, as the government did not adjust domestic oil prices in line with the international trend. Nepal had suffered an oil loss of about Rs 21 billion during the span of those four years.
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