NOC had mooted the idea as distance between the IOC depot in Siliguri and its regional depot in Biratnagar is much closer than Barauni refinery from where it is sourcing fuel now.[break]
By shifting to Siliguri, it had hoped to slash the fuel transportation cost that it incurs while importing from distant Barauni. Apart from that, NOC top brass had argued that designating a separate source to import fuel for the region will help it streamline its operations and make import and its inventory management in the region efficient.
But IOC has informed that for making supply from Siliguri, it will need to make ´out of the zone´ movement, something which will raise its cost of operations. Consequently, it asked NOC to share the cost it incurs while transporting fuel up to Siliguri depot from its refinery in Assam, if it is to lift the supply from there.
“Initially, IOC had proposed NOC to share 50 percent of the transportation cost. Lately, it has agreed to lower it down to 20 percent,” said an NOC source.
Irrespective of that change, the source told Republica that NOC is unsure whether it will be cost effective to make the switch and start importing from Siliguri.
Going by the bilateral supply agreement, IOC has designated its depot in Raxaul and refinery in Barauni as the official point of fuel supply for Nepal´s eastern and central regions. These official supply points are regarded as established ´zone of movement´ for IOC and the Indian government allows IOC to make bonded (tax free) supply, which Nepal is entitled to, from these established zones only.
“Sourcing fuel from Siliguri, thus, has another complexity related to bonded supply as well,” said the source.
NOC Managing Director Digambhar Jha, however, said how the IOC will arrange bonded supply from the point is its internal matter; not an issue for Nepal to worry about. “IOC has proposed different measures to sort this out,” he told Republica.
He noted that the proposal of IOC to share the transportation cost was a matter of worry for NOC and has made it necessary for it to conduct an in-depth comparative study of cost of import.
In this connection, NOC has recently formed a taskforce under the leadership of its board member Dev Raj Pathak to study out and make financial and technical recommendations on starting full-fledged import from the Siliguri depot. The taskforce is expected to submit its report within a month.
Meanwhile, officials involved in past bilateral negotiations with IOC said IOC previously was eager to supply fuel from Siliguri without any additional cost. “If it has asked NOC to share the cost now, NOC should be able to convince it to waive such unwanted cost,” he stated.
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