But the plan of starting commercial petroleum trade with China has fallen into uncertainty as no such agreement could be signed in Beijing.A Nepal-China joint communiqué issued on Wednesday states that both the sides would conclude commercial deal on supply of petroleum products from China only after completing certain negotiations.
The agenda of Nepal-China petroleum deal was excluded from the 10-point agreement that PM Oli signed with his Chinese counterpart Li Keqiang on Monday after both sides showed less interest to push the issue forward. The two sides gave emphasis to other issues like transportation, taxation and pricing prior to signing of the agreement. "Companies in respective countries have been encouraged to speed up negotiations and concerned agencies to study providing supporting policies on issues of pricing, taxation, transportation, quality control and customs and frontier formalities," the joint press statement reads.
Because of pricing, taxation and transportation issues, previous high-level government visits, including the one led by Deputy Prime Minister and Minister for Foreign Affairs Kamal Thapa had failed to sign commercial agreement with China.
The issues were expected to be sorted out during PM Oli's China visit.
Trade economist Posh Raj Pandey said that it is positive that the two sides have included the issue of petroleum trade in the 15-point joint communiqué. He, however, added that bilateral negotiations have to be made strong so that Nepal actually enters into petroleum trade with China. Pandey also said that Nepal's approach of buying one-third of its total petroleum consumption from China was wrong. "There should not be any binding and commitment in free trade," he added.
Nepal signed a framework agreement with China in October last year to procure one-third of the domestic demand for petroleum products from China.
However, the 15-point joint statement states that China has agreed to build oil storage facilities for Nepal, and send experts to Nepal to carry out feasibility study on oil and gas exploration.
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