PM Dahal’s direction to reduce fuel prices less likely to come into effect soon

Published On: January 6, 2023 08:05 AM NPT By: RAJESH KHANAL

NOC board cancels its Thursday meeting to avoid controversy

KATHMANDU, Jan 6: While Prime Minister Pushpa Kamal Dahal on Thursday directed the Ministry of Industry, Commerce and Supplies (MoICS) to reduce the prices of petroleum products with immediate effect, a pre-scheduled board meeting of Nepal Oil Corporation (NOC), the state-owned oil monopoly, was canceled to avoid facing the PM’s order.

Amid growing public calls against the NOC’s apathy to reduce the fuel prices even when the international prices came down heavily in the past few months, PM Dahal asked the concerned to reduce the fuel prices immediately. Following the PM’s directive, the NOC board that is led by the MoICS Secretary Toyam Raya was supposed to call the meeting to materialize the PM’s order. Secretary Raya, who was transferred to the Ministry of Finance on the same day, was reported to have canceled the meeting in the late afternoon.

According to an official of the MoICS, the outgoing secretary Raya canceled the board meeting in order to avoid a controversy that could arise by the state’s direct intervention to reduce the prices of petrol and diesel, in particular.

According to Surya Kiran Sharma, press coordinator of the Prime Minister, Dahal has asked the NOC to revise petroleum prices in line with the prices in the international market. “In an attempt to provide some respite to the general public, the Prime Minister intends to lower the prices of petrol, diesel and aviation fuels,” Sharma said.

The NOC has often been blamed for earning hefty profits at the cost of the general public. At the current rates, the corporation’s fortnightly profit is projected at Rs 990 million.

However, the NOC has been turning down all requests to reduce the price saying that it is yet to clear around Rs 18 billion dues to the government and Indian Oil Corporation, NOC’s sole supplier of fuels.

Last time on December 18, the NOC reduced the prices of petrol and diesel by mere Rs 3 per liter, in almost over five months since the enterprise had reduced the prices on July 4.

Five months ago, the price of crude oil in the international market stood at US $112 per barrel, which came down to $79.34 per barrel on Thursday. Over the period, the price of fossil fuels lost around 28 percent of their market prices.

The NOC claims it has been implementing the auto-pricing policy in its fossil fuel business since September, 2014. During the period, it earned billions of profits on an annual basis.

However, the state-oil monopoly is reluctant to lower the prices. It is often blamed for showing the difference in the petroleum prices in Nepal and the bordering towns in India, to make an excuse for not reducing the prices.

NOC officials refused to respond to the PM’s direction when Republica approached them for a comment on Thursday.