The cabinet meeting held on Friday decided to provide a loan of Rs 1 billion and Rs 800 million in VAT refund to NOC, the state-owned sole petroleum importer.[break]
Amid weakening capacity of NOC to pay the import bills on the back of increasing losses, the Ministry of Commerce and Supplies (MoCS) had forwarded a proposal to arrange additional fund for NOC recently.
“We have received a letter from the MoF on Monday for releasing one billion rupees. We will take a decision in this regard after a board meeting either on Monday or Tuesday. We will immediately release the amount if the board approves it,” Krishna Acharya, administrator of EPF told Republica on Monday.
The ailing NOC has already taken loans worth Rs 7 billion from EPF at 12 percent interest rate. NOC, which has a cumulative loss of Rs 23 billion, has loans amounting Rs 27.5 billion taken from different banks and financial institutions. Officials have said that NOC is likely to suffer an estimated loss of Rs 732.8 million in March.
NOC has been suffering losses of Rs 5.43 per liter in diesel and Rs 513.14 per 14.2 kg-cylinders while enjoying profit of Rs 2.27 per liter in petrol, Rs 9.16 per liter in kerosene and Rs 24.97 per liter in aviation fuel.
Shiva Prasad Pudasaini, spokesperson of NOC, said the loan amount would be utilized to pay the import bills owed to Indian Oil Corporation (IOC), the sole exporter of petroleum products to Nepal. According to Pudasaini, NOC owes around 1.75 billion rupees to the Indian supplier.
Meanwhile, NOC has distributed 900 kiloliters of petroleum products including around 400 KL of petrol on Monday. Pudasaini said 500 KL of petroleum products which was being transported to the capital from Amlekhgunj was stuck mid-way due to Makawanpur banda on Monday.
“Though supplies of petroleum products have been easing gradually, Makawanpur banda is set to partially affect the supplies in the capital,” said Pudasaini.
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