Prime Minister Dr Baburam Bhattarai, who met with petroleum dealers and liquefied petroleum gas (LPG) bottlers on Thursday, said he has already talked to New Delhi about the supply problem and requested its help. [break]
“I have personally talked to the Indian authorities about ending the scarcity. The supply-related problems will end soon,” Bishnu Prasad Chaudhary, Minister of State for Commerce and Supplies, quoted the prime minister as saying during the meeting.
As Dr Bhattarai did not elaborate, Chaudhary and the other participants in the meeting were unable to explain what actually the prime minister had asked and what the Indian response was. However, sources said the prime minister´s request to India was twofold: step up petroleum supply and issue the fuel on credit for the time being.
Currently, Indian Oil Corporation (IOC), the sole petroleum products supplier to Nepal, sends in supplies depending on the volume of payment it receives from NOC.
But NOC, saddled with a cumulative loss of well over Rs 20 billion, has failed to garner funds on its own and the Ministry of Finance (MoF), which has so far provided or guaranteed loans of Rs 21.36 billion, has also exhausted its resources. So the country has been unable to import enough fuel to meet normal demand over the past one month.
Although Commerce and Supplies Minister Lekh Raj Bhatta did not categorically confirm the prime minister´s request for supply on credit, he said India has responded positively and committed itself to step up the supply.
“Requests to India for more fuel and issue of fresh loans of Rs 2 billion to NOC have put multiple arrangements in place. Now the supply will ease within a week,” Bhatta told Republica.
Meanwhile, the cabinet on Thursday decided to immediately provide two billion rupees to Nepal Oil Corporation (NOC) to ease fuel supply within a week and give 33 percent concession to students, poor and farmers on cooking gas and kerosene. The agitating students have called off their protest after the government decision.
Minister for Commerce and Supplies Lekha Raj Bhatta, who had earlier declared that he would resign if supply of fuel did not ease within a week, said the cabinet decision would end fuel crisis for now. “The cabinet has formed an eight-member task-force under a member of the National Planning Commission for proper management of fuel supply,” Minister Bhatta said after the cabinet meeting in the evening.
The task-force members will comprise of joint-secretaries from finance, commerce, agriculture, industries and home ministries, an officer from the Nepal Rastra Bank and a general manager of NOC as its member secretary. The task-force will, among other things, determine how the decision to provide 33 percent concession would be implemented.
“The task-force will decide who will be eligible for 33 percent concession,” Bhatta added. The cabinet also formed another task-force, including a joint-secretary of Home Ministry and representatives from Nepal Police and Department of Commerce, to monitor fuel supply across the country.
Prime Minister Baburam Bhattarai had earlier invited the agitating student leaders of 13 political parties for a meeting and announced the 33 percent concession. “We put before the prime minister our demands about fuel price and our views about long-term solution to the fuel problem and he declared 33 percent concession in the presence of finance minister, supply minister and chief secretary,” said President of All Nepal National Free Students Union (ANNFSU) Madhav Dhungel.
Chairman of All Nepal National Independent Students Union-Revolutionary Himal Sharma explained that the concession on diesel was meant for farmers using pumping sets for irrigation.
Even after the government announced partial reduction on fuel prices, the students and eight youth wings continued to demand complete withdrawal of the January 18 hike and 50 percent concession on kerosene and gas on the rate that existed before the hike for the poor and students.
“We demand that all students be given 33 percent concession for now, but we will hold discussions on the eligibility to form our position,” Dhungel added.
Dhungel, however, refused to assure permanent solution to protest against fuel price hike in future. “That would only be possible if the government made reforms to increase efficiency of NOC and adopt dual pricing charging more to the rich and providing concession to the poor,” he said.
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