The agreement between the government and petroleum entrepreneurs was reached during a meeting chaired by Commerce and Supplies Minister Shankar Prasad Koirala in Kathmandu on Friday.[breal]
“The three protesting umbrella bodies ? the Nepal Petroleum Dealers National Association, the Nepal LP Gas Industries association and the Nepal Petroleum Transport Entrepreneurs Federation ? have agreed to withdraw their protest scheduled to begin on Sunday,” said the minute of the meeting.
In return, the government has agreed to postpone implementation of the Petroleum and Gas Transaction Regulatory Order, which would have opened the door for the private sector to import, process and distribute petroleum products, ending Nepal Oil Corporation´s monopoly.
“The meeting also agreed to hold consultations with the three associations and other stakeholders prior to introducing such a law in future and frame the law in presence of people´s representatives,” the minute said.
Earlier, petroleum entrepreneurs had threatened to halt sales and supply of petroleum products across the country from Sunday to exert pressure on the government to withdraw the Order.
They have been calling for complete revocation of the Order “because it was brought without consulting us.” They have also been arguing that the Order includes provisions that cannot be fulfilled by small firms.
The Order had fixed a paid-up capital of Rs 20 billion for establishment of a refinery, Rs 10 billion for setting up of a petroleum importing company, Rs 5 billion for establishment of an LPG importing firm and Rs 500 million for setting up of a gas bottling plant.
Although entrepreneurs have been citing these reasons to justify their proposed protest programs, consumer groups and government officials say their main intention was to stifle competition as they have been benefiting from a monopolized petroleum market in which their profits are guaranteed and they can operate flouting minimum safety standards.
Despite knowing their hidden intention, the government started coaxing them to sit for talks.
Accepting the invitation, petroleum entrepreneurs first held talks with Commerce and Supplies Secretary Lal Mani Joshi on Monday and again on Wednesday, both of which ended inconclusively.
A meeting with Commerce and Supplies Minister Koirala on Wednesday also could not settle the issue as the entrepreneurs remained adamant on their demand for the complete annulment of the Order, which was partially fulfilled on Friday.
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