Open Sesame

Published On: August 23, 2016 12:35 AM NPT By: Republica


New oil shortage
The long queues in front of the petrol pumps witnessed in the last few days have been reminiscent of the four-month-long border blockade last year. Nepal Oil Corporation (NOC), the government oil monopoly, blames the ‘long weekend’ for the new panic as three consecutive days of holiday meant that the Nepali oil depots that receive imports from India were closed. The oil tanker operators in Nepal pointed the finger at the annual ‘clean up’ of the Raxaul depot of Indian Oil Corporation, Nepal’s sole oil supplier.

Apparently, the Thankot depot of NOC is also leaking, making it hard to store fuel for the holidays. It doesn’t help that after last year’s blockade Nepalis tend to panic easily whenever there are rumors of oil shortage. These factors, together, seem to have created the perfect storm that resulted in the most recent oil crunch. They also suggest our government channels—chiefly the Ministry of Supplies and the NOC—are grossly inefficient, their inept administrators incapable of common sense. Why can’t at least some of the NOC depots stay open even during holidays? Surely, paying a handful of staff for overtime work is worth it, if it averts a national panic.

The NOC continues to be run like a third-grade third-world government bureaucracy even though it is these days making hefty profits. Why can’t some of this profit be used to keep depot staff in office during national holidays? Why can’t some of it be used to hire management consultants to shipshape the bloated oil giant? And why can’t the ministry and the oil monopoly together seriously explore the option of importing at least a part of Nepal’s oil demand from China, as was agreed during KP Sharma Oli’s China visit as prime minister last year? The ugly truth about Nepal’s oil bureaucracy is that for far too long the political parties in government have used it to oil their own machinery. The Ministry of Supplies is in fact so lucrative that whenever a new government is formed there is always a mad scramble for it. For there are endless ways of making a profit during the long process of import, transportation, storage and distribution of petrol products. There is for instance always a mismatch between the official oil imports and the amount distributed through petrol pumps. It is an open secret that millions of liters of petrol and diesel are sold in the black market, which would not be possible without the connivance of NOC staff.

But there is reason for hope. For instance the new NOC website is fairly detailed and it clearly presents the corporation’s fortnightly Profit and Loss Account as well as spelling out how much profit it is making from each unit of petro products. Such transparency is not something we associate with traditionally one of the most opaque bureaucracies in Nepal. It would be wonderful if some of its profits could also be used to update its website on daily imports. NOC operators also need to be more nimble-footed and professional, ready to immediately respond to changing market conditions. There is still a lot of room for improvement, starting with keeping its depots open during holidays.


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