KATHMANDU, Jan 4: Nepal Oil Corporation (NOC) has said that it is finding cash strapped every successive month as a result of accumulated loss due to surging prices of petroleum products in the international market.
NOC Managing Director Surendra Prasad Paudel said the government enterprise is facing a deepening financial crisis in recent days. “We have already utilized NOC’s deposit with banks and the funds allocated for the staffs’ welfare purpose,” said Paudel while speaking at a program organized by Society of Economic Journalists Nepal.
According to NOC, it currently incurs a loss of Rs 3.70 billion per month. The state-owned oil monopoly is facing a loss of Rs 5.44 per liter in petrol, Rs 2.92 per liter in diesel and Rs 758.25 per cylinder in cooking gas.
Paudel said they are now looking forward to using around Rs 15 billion of the price stabilization fund to settle payments to Indian Oil Corporation. “However, we fear that it won’t provide a backup for long if the similar loss persists till the future,” he added.
Prior to adopting the auto pricing system on petroleum products on September 29, 2014, NOC was compelled to borrow from the government to settle its financial liabilities. With the failure of the NOC to pay the outstanding due to the Indian oil supplier on time, the domestic market used to face shortage of fuel time and again.
Paudel said they are unable to fully implement the norms of the auto pricing system due to various reasons. “We will be holding talks soon with line ministry concerned and other government bodies to resolve the financial crisis of the government enterprise,” he added.