“It has landed yet another blow to consumers who are facing a sharp rise in food and other commodities´ prices. The timing of the decision - as it has come just prior to the festive season - is wrong. Hence, the government must revoke it," said Ram Chandra Simkhada of Consumers Rights Protection Forum.[break]
Citing increase in its loss to Rs 1.17 billion in September amid rise in international crude prices, NOC had raised the price of petrol by Rs 5 per liter, diesel and kerosene by Rs 4 per liter, aviation fuel by Rs 11 per liter, and liquefied petroleum gas (LPG) by Rs 55 per cylinder of 14.2 kgs.
But activists like Simkhada said the government had no moral ground to hike the oil prices because it has not implemented reforms to plug anomalies and leakages in the corporation, something which were identified by high-level commissions, despite repeated commitments.
If the government plugged the leakages, various commissions have reckoned it can easily cut loss of the corporation by 10 percent. “Instead of doing that, it chose the easier path yet again,” said Ranjit Karna, president of Nepal Student Union, affiliated with NC.
Nineteen students unions affiliated to the opposition parties, including Nepali Congress and CPN-UML, even unveiled a protest program, demanding the government revoke the decision within 24 hours, that is by Tuesday evening.
“We are handing over a memorandum to the prime minister on Tuesday. If he did not withdraw the hike decision, we will organize protests, including the Kathmandu Valley Banda on September 9,” said Kishore Bikram Malla, general secretary of All Nepal National Free Student Union, affiliated with CPN-UML.
Apart from plugging leakages at the NOC, the agitating student unions have also demanded the government to first implement 33 percent subsidy, which it promised to the students, poor and farmers few months ago, before taking any price hike decision.
NOC Spokesperson Mukunda Dhungel, however, defended the decision as corporation´s compulsion as Indian Oil Corporation´s (IOC´s) fresh supply rates issued on September 1 further widened its loss by more than Rs 700 million from loss of Rs 410 million a month ago.
“Beside, the sole Indian supplier has curtailed supplies by half since last two weeks, as we failed to pay enough to the IOC in the absence of fund,” said another NOC official. According to him, consumers have not realized its impact because the corporation was fulfilling the demand by distributing oil from the stock.
Dhungel told Republica that the corporation on Monday received just about 1,400 kiloliters of petroleum products from Raxaul depot of the IOC - the largest import point from where Nepal sources more than 60 percent of total oil import.
“Worse for NOC is despite the hike and resistances, it still continue to suffer a loss of Rs 739.40 million,” said Dhungel, adding that the raise has not completely bridged the gap between import and sales rates.
Post price hike calculations of NOC suggest, it continues to suffer a loss of Rs 9.97 on a liter of diesel and Rs 363.60 on a cylinder of gas. It, however, earns a profit of Rs 4.23 on a liter of petrol, Rs 19.40 on a liter of aviation fuel and about Rs 7.71 per liter of kerosene.
“The profits on petrol, kerosene and aviation fuel appear handsome. But unfortunately, their cumulative sales merely make one-third of our total transactions; hence do not make up for the loss inflicted together by diesel and LPG,” said Dhungel.
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