NOC doubling storage capacity, adding new depots

KATHMANDU, June 3: There´s finally some good news for consumers who´ve been hit hard now and again by the short supply of petroleum products: to step up supplies to Kathmandu, the Nepal Oil Corporation (NOC) is doubling its fuel storage capacity at the Thankot depot. [break]

The NOC is also raising the storage capacity of major depots outside the Valley and is adding new depots in the Eastern and Mid-Western regions as well, to match their supply with the growing demand for fuel.

“In the first phase, we will be raising the petrol-storage capacity of the Thankot depot to 5,000 kiloliters (KL) from its present effective capacity of 1,900 KL,” NOC Chief Digambhar Jha told myrepublica.com. Diesel´s storage capacity too is being raised to 12,000 KL.

The news gets better. The government has already granted its consent to the corporation to acquire land for installing new storage tanks. One of the pieces of land is located to the east of the Thankot depot and the other borders the depot´s boundaries.

The overall process for installing the depots and for developing them could take about a year, Jha stated. Once the processes are complete, the NOC should have enough fuel to tide over, for a few days, at least, the sort of fuel shortages that are so common now, and which are sparked by even minor disturbances that occur along the highway.

The NOC is seeking to solve the supply problem by addressing the weakest link in the NOC´s supply chain: the low-storage capacity of the NOC´s depots is one of the key constraints that prevents the corporation from providing adequate petroleum supplies around the country. Currently, the corporation is operating with stock levels that were determined about a decade ago; but the demand for fuel, petrol in particular, has more than doubled over the last couple of years.

The daily demand of petrol currently stands at 280 KL in the Kathmandu Valley. During shortages, when people rush to get hold of fuel, even when they do not immediately need it, demand shoots up to as much as 450 KL. That forces a rapid depletion of the fuel stock and creates further panic in the market.

In a bid to strengthen stock back up, the corporation has also decided to more than double the storage capacity of its major petroleum products at the Amlekhgunj depot. At present, Amlekhgunj, the largest depot in the country, has a capacity for storing a mere 1,960 KL of petrol and 16,100 KL of diesel.

“We are mulling over raising that capacity to 3,000 KL for each product,” said Jha.

Increasing the capacity to such levels has been planned mainly because a larger depot will be needed once the pipeline system that the corporation is planning to build between Raxaul and Amlekhgunj, in partnership with the Indian Oil Corporation (IOC), comes into operation.

The IOC has informed the NOC that once the pipeline project materializes, the system will pump out fuel in batches of 3,000 KL--that´s the volume that will be pumped at one go. So the corporation needs to build tanks of at least that capacity, if it is to make use of the pipeline.

The corporation has further decided to construct new depots in Charaali, in Jhapa, and in Mahendranagar, Janakpur and Surkhet; it will also upgrade the capacity of its depots in Pokhara, Bhairahawa and Biratnagar.

“The depots in Jhapa and Surkhet are being developed taking into account the present consumption growth and also the possible rise in demand once the transportation network in the region expands, particularly in the Mid- and Far- Western regions,” said Jha.

Jha opined that the coming into operation of the numerous roads being constructed in the mid- and far-west of Nepal, roads that connect remote district headquarters, would create in the regions a higher demand for fuel, particularly diesel, and a large-scale depot in Surkhet would cater to that demand.

Present Storage Capacity (in KL)