Yes, the country is facing an acute fuel crisis. Yes, the source of our oil supplies needs to be diversified away from India. And yes, if the private sector can help ease the fuel crisis, their help has to be urgently sought. Until recently Nepal Oil Corporation (NOC), the state oil behemoth, had the monopoly over import and sale of oil in Nepal. NOC, for its part, used to import all its oil from Indian Oil Corporation. But after the landmark oil agreement with China, Nepal is no longer bound to import only from India. This will stand the country in good stead over the long haul. But as urgent as the need to ease fuel crisis is, it does not mean importing oil by subverting due process. Yet NOC Managing Director Gopal Bahadur Khadka has shamelessly admitted that NOC has illegally awarded a petroleum supply contract to Birat Oil, a private company, because "it is impossible to import petroleum products legally."Nepal Oil Corporation's agreement with Birat—to which it had already extended Rs 200 million, again illegally, to open a letter of credit for oil imports—is truly bizarre. NOC will be buying petrol from Birat Oil for around Rs 220 a liter, which is over two times the current going rate. Apparently the high cost will be passed on to the consumers. In comparison, it only costs Rs 135 to import a liter of petrol from China. Something clearly is amiss both in the haphazard manner in which the contract was awarded and the money for letter of credit released. But besides accepting the illegality in the awarding of the contract to Birat Oil, NOC head Khadka said something even more intriguing on Thursday. When asked by a parliamentary committee about how he could so blatantly bypass due process, he answered that he had been given the mandate to import oil "at any cost" and to immediately ease the fuel crisis. Such a sweeping directive could have come only from the prime minister.
Again, we understand the desperation. The KP Oli government had been widely criticized for its failure to ease fuel supplies and the public pressure on the new prime minister has been steadily building. But that does not mean he has the carte blanche to do as he pleases. Nor does the agreement with Birat make much logistical sense. Birat Oil is importing from Siliguri in India and the oil has to come through the same customs points that have been shut down for the past two months. There is no reason oil tankers of Birat should be given a preference and allowed into Nepal. So the awarding of the contract to Birat Oil is wasteful, illegal and illogical. We call on the Commission for Investigation of Abuse of Authority (CIAA) to investigate this sordid affair and bring the culprits to book.
Moreover, in the future, only the bidders who agree to import oil by following due process and at a reasonable price for Nepali customers should be given the go-ahead. In choosing possible suppliers, preference should be given to those keen to import from China, not the least because the Chinese oil will be relatively cheaper and supplies from there more reliable.
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