KATHMANDU, Aug 9: The recent price adjustment for Liquefied Petroleum Gas (LPG) has brought a huge profit margin for Nepal Oil Corporation, and only nominal relief to the consumers of cooking gas.
As per the new adjustment made in the LPG price last week, the profit for NOC, the petroleum supply regulator for the country, has increased by Rs 66.63 per cylinder of cooking gas to Rs 111.7. Prior to the new adjustment, NOC had been making Rs 45.07 in profit per cylinder.
The state-owned fuel monopoly, however, reduced the price for consumers by only Rs 25 per cylinder. NOC adjusted the fuel price last week as per the revised rate sent by its sole supplier, Indian Oil Corporation (IOC), for the month of August.
Such a self-serving decision by NOC has once again shown its scant regard for consumers. With the history of public antipathy that has dogged it because of its anti-consumer measures time and again, consumer rights activists believe NOC is in for further flak in the days to come.
In its revised fuel rate for August, IOC has reduced the LPG price by an average of Rs 4,200 per metric ton as compared to its rate for July 16-August end. While IOC has reduced the price of LPG coming from Haldia and Barauni by Rs 4,287.2 per metric ton, the price of LPG from Mathura and Karnal has been reduced by Rs 4,214.63 compared to the rate on July 16. Likewise, the price of LPG coming from Paradip has been slashed by Rs 4,282.67 per metric ton.
IOC supplies LPG to Nepal from the above-mentioned five refineries. An NOC source said that the reduction in LPG price by IOC this time was significant.
“It is sad but the fact is that the government authorities are cheating us and nothing is transparent. Recent adjustments in the price of LPG and other petroleum products are full of flaws. The adjustments have not been transparent and run counter to the Automatic
Fuel Pricing Mechanism adopted by the government,” said Madhav Timalsina, president of Consumer Rights Investigation Forum.
The Automatic Fuel Pricing Mechanism that the government adopted in September 2014, states that NOC should adjust fuel rates every fortnight as per the international rates. IOC revises its fuel rate every fortnight.
“NOC, which increased the price of petroleum products under various rationales when the fuel rates were high in the international market, is now not reducing prices in line with the decline in international rates,” said Timalsina. “This is unfair, and the government needs to take action against NOC officials involved in flouting the laws and indulging in anti-consumer activities,” he added.
Meanwhile, senior officials at NOC don’t have exact information and data regarding NOC’s profits from LPG and other petroleum products, though the NOC website clearly mentions every detail. Newly appointed NOC spokesperson Bhanubhakta Khanal was unaware that NOC is making huge profits in LPG.
In its new adjustment, NOC had also slashed the price of petrol, diesel and kerosene nominally by Rs 2 per liter. As per the new adjustment, NOC’s projected monthly profit has crossed Rs 550 million.