Based on sales growth over the past month, the NOC has estimated some 200 kiloliters (KL) of diesel is currently being consumed daily to run generator sets alone. In most of these cases, spending remains at an added cost over regular power bills, irrespective of how much electricity customers consume from the national grid.
“The consumption soared to this level after the state raised load-shedding hours to above 12 hours a day,” stated Mukunda Dhungel, spokesperson at the NOC. In different pretexts, Nepalis are presently bearing around 14 hours of load-shedding.
The extra expense burdening industries and service sector players has substantially raised their business costs.
- an NOC official.
Worse still for industries and smaller firms which are mired by a host of other problems, is that they will continue to bear this additional cost unless the power supply situation improves dramatically.
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“If the situation of electricity supply does not improve they will have to bear this cost this month as well, and also over the span when the load-shedding will continue,” said Dhungel.
According to a senior official at Citizens Bank, which has few branches, the situation has forced the bank to spend some Rs 5 million on diesel alone in order to continue providing normal services to its clients during prolonged load-shedding hours.
“This is an added cost over what we incur regularly. For many established banks, having a large number of branches, the cost is still higher. Add to it the cost of declined customer satisfaction that has resulted from power hiccups,” he said.
Owing to the additional cost and inconveniences, commercial banks have already requested Nepal Ratsra Bank (NRB) allow them to operate five days a week, announcing two days as off days when they could provide limited services for a short duration only.
Besides the entire financial sector, the hotel industry, manufacturing and processing industries, export-oriented industries, poultry, wielding industry, pharmaceutical companies, and health and education institutions, among others, also complain of similar added cost and inconveniences.
Traders said costs were sharply eroding their competitiveness, contributing to the rise in market prices of commodities. Cyber cafés, photocopy and other smaller businesses that fail to bear this cost, on the other hand, have been forced to shut down their outlets.
The NOC has reported consumption of diesel in the country soared to around 35,000 KL last month (mid-January to mid-February, 2009), whereas regular demand for the fuel previously stood at 25,000 KL.
“Effective consumption of diesel has risen by 350 KL a day over the period, and 60 percent of that growth is due to load-shedding,” said an NOC official.
He attributed the rise in sales of the remaining 150 KL a day to natural demand growth and the replacement of kerosene in the industrial and automotive sector after diesel and kerosene prices were made equal.
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