The corporation asked for the money in a letter to the Ministry of Commerce and Supplies on Monday. It has also requested the Ministry of Finance to release Rs 1.54 billion in VAT refund - something which it owes from the government. [break]
NOC officials said they need the fund to settle its outstanding bills to the Indian supplier and also to regularize import, which has gone down of late due to its failure to pay enough to the Indian supplier, for the next three months.
“The fund is crucial to ensure smooth supply during the festive season of Dashain, Tihar and Chhath,” stated NOC Spokesperson Mukunda Dhungel.
According to the NOC, it has dues of around Rs 660 million to settle to the Indian Oil Corporation (IOC).
“Beside, the Indian Oil Corporation has curtailed the supplies by half since last two weeks because we could not pay it enough to finance normal import,” said Dhungel.
Amid meager payment, NOC says it is receiving just about 1,400 KL of petroleum products a day from Raxaul depot of the IOC, the largest import point. The volume is almost half of what it used to collect on any normal day.
That is not all, the IOC has curtailed supply by similar extent from all other supply depots and refineries.
“Consumers are not feeling the heat of the cut because we are maintaining supplies through stock. But this has depleted our reserve to about 36,000 kiloliters from more than 39,000 KL,” said Dhungel.
As the demand for fuel rises during the festive season, officials said the NOC can neither afford to continue relying on stock to maintain supplies, nor it has enough fund to resume normal import.
“It is true the hike decision has raised cost for consumers, but as it has not reuced import-sales price gap, we still suffer Rs 739.40 million a month at the new rates,” said Dhungel.
Given the situation, NOC officials stated that their knocking of government´s door was only an obvious move. “We have a cumulative loss of about Rs 28 billion, our fund flow is in a complete mess and net worth stands negative at Rs 12 billion. Who will give us loans, if not the government?” commented other NOC officials.
The corporation, which suffered a loss of around Rs 10 billion in 2011/12, also has outstanding debt of Rs 27.52 billion to repay to the government and different bank and financial institutions.
Such soggy picture of the finances of the corporation exists because the governments over the last seven years turned deaf ears to experts call for gradual adjustment of local retail rates in line with the international trend and enforcement of automatic pricing mechanism (APM).
However, as leaders refrained from taking such decisions, perceiving them as potential political risks, the governments of late have been forced to effect sharp rise in prices, landing sudden burden on consumers and sparking furor among student unions.
Meanwhile, Prime Minister Baburam Bhattarai refused to meet with the 19 agitating student unions that had announced of submitting a memorandum to the PM to protest Sunday´s price hike decision. He also paid no heed to their 24-hour ultimatum for the rollback.
“The PM did not pledge us time to submit our memorandum. Hence, we have decided to hold dialogue from the street,” said Madhav Dhungel, president of All Nepal National Free Student Union affiliated with CPN UML.
The student unions said they are starting their protests from Wednesday.
Related story
NOC Thankot Depot distributes oil on Laxmi Puja
