KATHMANDU, Oct 8: Nepal Oil Corporation (NOC) on Friday, began the process to break its four-decade-old business relation with the Indian Oil Corporation (IOC) -- its sole supplier of petroleum products till date -- saying that the latter failed to honor a commercial agreement signed between the two firms.
NOC started search for new fuel supplier by calling expression of interest from local and international firms by publishing a public notice on Thursday. 'After IOC defaulted on the commercial agreement reached with NOC, we have been forced to search for a new supplier,' said an official at the NOC.The commercial agreement reached between NOC and IOC states that the latter has to regularly supply petroleum products to NOC under all circumstances. However, IOC has stopped or drastically cut down fuel supply to Nepal over the last two weeks. The IOC move followed the Indian government"s dissatisfaction over the promulgation of the new constitution in Nepal on September 20.
'Indian attempt to flex political muscle by undermining the commercial agreement is unacceptable,' the source said, adding that the NOC had already written to the IOC seeking explanation for the supply cut and Rs 870 million in compensation. 'However, IOC replied that it was forced to follow the instructions of the government order as it is an Indian government undertaking.'
India has imposed an unofficial economic blockade on Nepal for the past two weeks by stopping movement of Nepal-bound cargo, especially petroleum products, on border.
NOC Thursday sought expressions of interest from local and foreign fuel supplier firms following a government instruction to search for alternatives to IOC. According to Thursday"s public notice, interested firms are supposed to submit their proposal within three days detailing how can they supply fuel for the next 15 days. According to the notice, the suppliers can use both land and air routes.
NOC has sought supply of 200 kiloliters of diesel, 100 kiloliters of petrol, 200 kiloliters aviation fuel and 100 metric tons of LP Gas, per day, for 15 days.
IOC"s reluctance to supply fuel to Nepal has not only crippled people"s regular life, but also paralyzed the economy. While, hundreds of industrial units across the country have already downed their shutters, many are on the verge of closure due to disruption in supply of fuel, raw materials and labour.
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