KATHMANDU, Jan 6: Nepal Oil Corporation (NOC), in yet another instance of its flouting the law in dealings with Birat Petroleum, has decided to allow the private firm to supply the market with petroleum products through NOC's own distributors, and that too at the very high rate proposed by Birat itself.
Going against the Distribution Regulations and Petroleum Policy, NOC managing director Gopal Bahadur Khadka on Tuesday allowed petrol pumps in its distribution network to purchase the petrol imported by Birat and sell it at Rs 190 per liter.As per the legal provisions, fuel stations authorized to distribute NOC fuel cannot purchase petroleum products for sale in the market except from NOC. Moreover, NOC's allowing Birat Petroleum to sell petrol at Rs 190 per liter, as proposed by the firm itself, is controversial. NOC also purchases petrol from India and sells it in the market at Rs 104 per liter.
Since acquiring a license to import petroleum products for six months in an NOC global tender, Birat Petroleum has imported five tankers of petrol—almost 100,000 liters.
Petrol in India costs Indian Rs 65.5 (Rs 105.77). However, NOC approved the rate proposed by Birat Petroleum even though it is clear the private company has kept a big profit margin.
While repeated controversial decisions by the state-owned supplier has dimmed NOC's image, the dual price of petrol in the market is sure to interrupt the distribution chain and give rise to other anomalies.
Sources at NOC itself said the decision is controversial and will cause chaos in the market. "The decision to allow the private sector to import petroleum products was taken without identifying the distribution mechanism and doing other homework," an NOC board member said, adding, "All these issues are the result of this hasty decision."
After importing 100,000 liters of petrol, Birat officials had been lobbying different government bodies, including NOC and the Department of Commerce and Supply Management (DoCSM) for its distribution in the market. The private firm was also caught openly selling petrol to consumers at Rs 220 per liter in the capital last week.
Birat Petroleum, which was awarded the tender to supply petroleum products to Nepal after India imposed its blockade, had unilaterally terminated the supply contract with NOC after the tender award proved controversial. Birat had then gone ahead to import petroleum products to Nepal through its own efforts.
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