The oil monopoly has imported just about 1,000 kiloliters of fossil fuel a day from Raxaul depot of Indian Corporation (IOC) in the last 10 days, shows imports record of NOC. The volume is mere 40 percent of what it normally receives from its largest importing point. [break]
NOC officials attributed low import to apathy shown by the government to adjust fuel prices or pledge Rs 1 billion in loans that it had sought to maintain fund flow. However, their statements did not match with the records of NOC´s finance department.
The department´s records show that NOC has already paid the IOC in full for importing as much fuel as the country needs for June.
“The statement that NOC is not in a position to finance imports is very untrue,” said an NOC official.
Consumer rights organizations said NOC´s strategy is to create shortage in the market in order to compel the government to adjust prices. They urged NOC management to roll back its strategy.
“NOC might be operating on loss, but the whole strategy of creating shortage and troubling consumers to get prices adjusted is wrong. We condemn the move,” said Jyoti Baniya, general secretary of Consumers´ Rights Protection Forum.
Nepal Petroleum Dealers´ Association (NPDA) officials too asked NOC to immediately resume normal imports, especially as the strategy has already started showing its impact in the market.
Interestingly, NOC managing director Digambar Jha, who enforced the strategy, left for Russia on a study tour Monday and is returning only next week. Other NOC officials refused to talk on the issue.
NOC Spokesperson Mukunda Dhungel did not agree that NOC was intentionally creating shortage in the market. Instead, he said it was supplying enough fuel even by using its stock.
Since NOC has capacity to store petrol enough for just seven days, informed sources noted that the strategy to maintain supply through stock would eventually spur shortage in the market.
Apart from exerting pressure on the government to adjust prices, officials that are in favor of the strategy argued that the strategy would also enable NOC to settle past dues of IOC.
NOC has dues worth Rs 640 million to pay to IOC.
“Because we have already released full payment of June, we can use the money to settle past dues by importing less fuel,” he said.
NOC intensified its pressure to hike price this week, mainly as India´s Saturday price revision widened the cross-border price gap on petrol by about Rs 5 per liter and diesel by some Rs 2 per liter.
While the gap is enough to spur illicit backflow of fuel to India, NOC has argued it will jack up its loss, if the government did not bridge the gap. However, it has remained silent on adjusting liquefied petroleum gas (LPG) price, which is generating some three quarters of its total loss.
No shortage: NOC
Consumers suffered a sudden scarcity of fuel in Kathmandu Valley Monday. Nepal Oil Corporation (NOC) attributed this to the closure of distribution over the last two days of public holidays and not due to its strategy of importing less.
"We have enough stock and have intensified supplies on Monday. There will be no problem from Tuesday onwards," NOC spokesperson Mukunda Dhungel told myrepublica.com.
Although the corporation was receiving less fuel, he said the corporation pumped out 300 kiloliters of petrol and 400 kiloliters of diesel in the Valley that day.
The volume supplied was enough to meet daily demand. "The problem surfaced only because tankers delivering fuel took time to reach the refilling stations. Most dealers resumed sales from evening," said Dhungel.
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