Stating that any trading partner should have open approach while entering into commercial relationships, they emphasized on the need to end all sorts of bindings and quota systems in order to develop commercial petroleum relationship with China.Such notion from country's economists came at the time when Prime Minister K P Sharma Oli, who is on a weeklong China visit, failed to sign the much anticipated commercial petroleum accord with the northern neighbor. "Any type of quota-system in commercial relationship is against the principle of free trade, and therefore, can hamper efforts develop wise commercial relationship," former commerce secretary Purushotam Ojha told Republica.
In October last year, Nepal had proposed to China to supply one-third of Nepal's total demand of petroleum products and a Memorandum of Understanding (MoU) was signed by the two neighbors accordingly.
According to Ojha, China, being one of the largest economies in the world, would look everything from commercial prospective. "One-third demand of Nepal's petroleum demand, which stands at around 400,000 kiloliter per year, is a very low volume from China's point of view. Why should China invest huge amount to develop infrastructures in its side as well as in Nepal side to enter into such a low volume of fuel trade?" said Ojha.
He also said quota-free approach for commercial fuel trading might encourage China to make Nepal its petroleum trading partner.
Similarly, trade economist Posh Raj Pandey said that there should not be any type of bindings and commitments while developing commercial relationship with any nation. "If Nepal wants to enter into commercial petroleum trade with China, it should remove the 'one-third' phrase from the earlier signed MoU and approach China to sign agreement for petroleum trade," said Pandey.
Both Ojha and Pandey also said that commercial fuel accord with China also heavily depends upon factors like logistics, connectivity, storage and price.
"Even if the fuel accord had been signed this time, its implementation would have been difficult as infrastructures in Nepali side are very poor," added Ojha.
Officials of Ministry of Supplies also say there should be a provision that allows Nepal to procure fuel from China as per the need. "Before PM Oli left for China, we had already written to the Ministry of Foreign Affairs (MoFA) to do the needful for replacing 'one-third' in the MoU by 'as per need'," Deepak Subedi, joint secretary of MoS, told Republica.
Commercial petroleum deal with China was expected to be signed during PM Oli's ongoing China visit. The failure to sign the deal has put Nepal's plan to start commercial petroleum trade with China into uncertainty.
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