Private firms can start petroleum trading after two years

Published On: July 18, 2016 01:50 AM NPT By: Sujan Dhungana

Govt has issued permanent license to 11 firms
KATHMANDU, July 18: Ending Nepal Oil Corporation's monopoly in petroleum trading, the government has issued permanent license to 11 private companies which allows them to do petroleum business in Nepal.

The government recently issued such license to 10 companies. Malika Petroleum Pvt Ltd had received license for petroleum trading last year. These companies can begin petroleum trading like Nepal Oil Corporation (NOC) if they become successful to develop necessary infrastructure within two years.

Petrolimex, National Petroleum, Trans Himalayan Corporation, Sonapur Mineral Oil and Birat Petroleum, among others, recently acquired permanent license from the government.

“We have issued petroleum trading license to 11 companies. Of them, three are in interested to trading of Liquefied Petroleum Gas (LPG) only,” Gokul Dhital, director general of Department of Supply and Consumer Welfare Protection (DoSCWP), told Republica.  “They will have to develop necessary infrastructures within two years.”

According to Dhital, these companies will have to submit another proposal to DoSCWP after building necessary infrastructures. A technical committee formed by the department will study the infrastructure and determine whether or not they are capable of doing petroleum trading.

“Firms that develop all specified infrastructures and meet other standards set by the government will be allowed to enter the petroleum market,” added Dhital.

Among others, the firms should have storage capacity of 20,000 kiloliters and fuel pumps of their own. Similarly, quality of petroleum products imported by them should meet the standards specified by the government.

Stating that the decision to allow private sector in the petroleum market was the need of the time and context, Aananda Regmi, spokesperson of Ministry of Supplies (MoS), said that the new Petroleum Act, which is in the pipeline, will address different issues related to country's petroleum industry.

NOC officials, however, said it won't be easy for the private sector to enter the petroleum market. “These firms might have showed interest after seeing NOC logging huge profit over the past last two years,” an NOC official told Republica. “However, it is not easy to develop infrastructure specified by the government.”


Bottlers of Liquefied Petroleum Gas (LPG) have given consumers an opportunity to exchange their cylinders with cylinders of other bottlers.

According to Nepal LP Gas Industry Association (NLGIA), customers can exchange their cylinders with other cylinders by visiting six bottling plants.
The campaign that started on Sunday will continue for a week.

Officials of NLGIA said that the scheme aims to facilitate consumers, who brought different local cylinders in haste, during the petroleum crisis some months ago because of border obstructions.

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