G2G talks with China to decide petro deal

KATHMANDU, Dec 21: Nepal's much anticipated plan to import petroleum products from China now depends heavily on the government to government (G2G) talks that the two countries are expected to hold soon. At a time when lack of high-level G2G talks is said to be delaying a commercial agreement, the visit of Deputy Prime Minister and Minister for Foreign Affairs Kamal Thapa to China is expected to expedite the entire process.

The government is preparing to send a high-level team to China to sign various G2G trade agreements, including a commercial deal on petroleum products.

Though separate teams from Nepal Oil Corporation (NOC) and the Ministry of Commerce and Supplies (MoCS) have visited China to sign a commercial petroleum supply deal, the visits could not impart the final nudge. While Nepal has sought a tax waiver for the petroleum product imports, the Chinese government-owned Petro China Company Limited (PCCL) has been urging that the tax issue  should be settled at government-level.  

Mohan Shrestha, press advisor to Minister Thapa, said a meeting scheduled for Monday will decide the date and other particulars related to Thapa's visit to China.

“China has from the first been demanding a high-level government team to settle all the issues,” Mukunda Ghimire, spokesperson of NOC, told Republica, adding, “We too expect that the government team led by Deputy Prime Minister Thapa will give a nudge to the commercial agreement.”

Besides a petroleum agreement, the high-level team visiting China this time is also expected to sign other trade agreements, including a Bilateral Investment Promotion and Protection Agreement (BIPPA). China had sent its draft for a BIPPA to Nepal four years ago. Nepal sent its feedback on the draft in December last year. Stating that he was away from the country for a few days, Commerce Secretary Naindra Prasad Upadhaya said  he was yet to be updated on the high-level team's visit to China.  

Meanwhile, Sushil Bhattarai, director of NOC, said that China has sought a strong commitment from the government-level on long term trade. “The visit of the high-level government team will certainly open doors for a commercial pact,” Bhattarai told Republica, adding, “As commercial trade  with Nepal in petroleum products needed much infrastructural development, China had always been seeking talks at the government level.”

Bhattarai, who returned from China on Friday, said, "Supply of petroleum products to Nepal from Qinghai province seems feasible.”

“The Qinghai-based refinery of PCCL has agreed to supply petroleum products to Nepal as per demand by any means after it gets the go-ahead from the central Chinese government.” According to Bhattarai, the Qinghai-based refinery is positive on transporting petroleum products up to Kerung. The distance between Qinghai and Kerung is around 1,850 kilometers, according to Bhattarai.

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