The state-owned oil monopoly blamed for charging high price from consumers to earn hefty profits
KATHMANDU, July 13: Nepal Oil Corporation (NOC) has projected a profit of Rs 11 billion by the end of the current fiscal year, which is 25.7% more than the state enterprise earned in the last fiscal year.
The oil monopoly unveiled its financial position in a press meet organized on Sunday. According to the corporation, the profit stood at Rs 10.86 billion as of Sunday. By the end of next fiscal years, the profit is likely to hit Rs 11 billion, says the NOC.
The state enterprise is being heavily criticized for charging exorbitant prices of petroleum products to secure abnormal profits. The NOC recently hiked the fuel prices twice in the past two weeks, violating the working guidelines endorsed by the enterprise itself.
The automated pricing system guideline of 2014 bars the NOC from raising price more than 2 percent at a time. As per the law, NOC can revise the price fortnightly only after receiving the latest pricing from Indian Oil Corporation, the sole supplier of fuel to Nepal. The NOC increased petrol price by Rs 5 per liter when the price was Rs 96 per liter last time. It means the enterprise hiked the price by more than 5% at once.
The NOC is often blamed for not reducing the price as per the international market. A group of Nepal Student Union activists staged a sit-in protest in front of the head office of the NOC on Sunday morning, demanding that the corporation revoke its decision to hike the prices of petroleum products.
Following the outbreak of coronavirus, the global price of crude oil even fell below US $30 a barrel in March. The NOC only reduced the fuel price nominally. The NOC records show that it reduced the petrol price just by Rs 2, from Rs 108 per liter to Rs 106 per liter during the period.
In the past five years, the NOC earned cumulative profits of Rs 52 billion. It has maintained a reserve of Rs 19 billion. It carried out transactions worth Rs 240 billion in the current fiscal year.
The NOC contributed Rs 65 billion to the government revenue. It involves value added tax of Rs 25.52 billion, customs duty of Rs 15.13 billion, road maintenance fee of Rs 5.02 billion, pollution tax of Rs 3.01 billion, infrastructure development tax of Rs 13.67 billion and income tax of Rs 3.85 billion.