Over Rs 7b collected in infrastructure fund

Published On: April 25, 2017 10:03 AM NPT By: Ashim Neupane  | @ashimnep

Government plans to use fund to build Budhi Gandaki hydropower project

KATHMANDU, April 25: Though the Budhi Gandaki Hydroelectricity Project is not making any progress, the government has collected over Rs 7 billion from consumers to build the project.

Nepal Oil Corporation (NOC) has been levying infrastructure tax on petrol, diesel and Aviation Turbine Fuel (ATF) since the beginning of the Fiscal Year 2016/2017. The state-owned petroleum monopoly has been collecting Rs 5 per liter on petrol, diesel and ATF as infrastructure tax. NOC officials say the government will mobilize Rs 9 billion by the end of the current fiscal year.

The government aims to invest the money collected as infrastructure tax to build Budhi Gandaki Hydroelectricity Project (1200 MW). Unveiling the budget for fiscal year 2016/17, the government had said that the construction of the project will start within six months. But only compensation process has started even though it has already been nine and a half months since the announcement was made.

“NOC pays the tax at the customs offices in border points. We cannot us the fund as it goes directly into the government treasury,” an NOC official said.

Along with infrastructure tax, the government has been levying road maintenance tax, infrastructure tax and pollution tax on petroleum products. Consumers are also forced to make some contribution to price stabilization fund.

Meanwhile, Jyoti Baniya, a consumer right activist, said that the taxes being levied on petroleum products were illogical. 

“Nowhere in the world is infrastructure tax collected from consumers. Similarly, NOC is not implementing price stabilization system despite collecting some fee from consumers in the name of price stabilization fund. 

It only raises price of products whenever price increases in the international market,” Baniya said, adding: “NOC should also adjust price when price of petroleum products fall in the international market.” 

He also demanded that the government rollback its decision to levy infrastructure tax and scrap the price automation fund if it cannot implement the fund properly.

NOC officials say the corporation is logging profit in petrol, kerosene and aviation turbine fuel (ATF), while it is suffering loss in LP gas and diesel. 

As per the new rates forwarded by IOC, NOC will face suffer loss of Rs 65.06 million in April, they added.

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