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When a lawmaker cries foul

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KATHMANDU, Jan 27: Akwal Ahmad Sah, a lawmaker from Madhesi People´s Rights Forum (Republican), was all ire when Finance and Labor Relations Committee (FLRC) of Parliament met on Friday.



Shah had his reasons to be so. He and his family members had not been able to light stove in the kitchen for last two days. Despite requests, the dealer from where he regularly sourced liquefied petroleum gas (LPG) did not provide him the LPG.[break]



He even arranged a kerosene stove as an alternative. But apparently, the lawmaker who thought everything was normal in the country till he himself was affected suddenly realized there was a scarcity of kerosene as well in the market.



"Yesterday, I had to request a nearby restaurant to boil milk so that we (me and my family) could eat at least something with it. Today, I sent my kids to school by feeding them just tea and bread, buying them from a nearby shop," said solemn Shah.



"There is a severe shortage of LPG. There is scarcity of kerosene as well. With 14 hours of power-cut, I cannot depend on electricity to cook food. How does this government want us to live and survive," Shah questioned.



"I am a political man and have some connections. If I am facing such troubles, just imagine what must be the situation of voiceless common consumers? Where is the state leading us to," he asked.



Owing to scarcity, consumers in the Kathmandu valley and other parts of the country have been queuing up for as long as 11 hours to get hold of a few liters of petrol. Situation of diesel and kerosene supply is still worse.



And, if that were not enough, Nepal Oil Corporation (NOC) has failed to manage even the supply of LPG -- popular cooking fuel.



Sadly, however, not just ministers, even lawmakers and different parliamentary committees that are supposed to seek answers from the government on public issues had not raised a single question over the crisis.



On Friday, FLRC finally called top officials of Ministry of Commerce and Supplies, Ministry of Finance (MoF) and NOC. But, NOC Deputy Chief Jayaraj Acharya and Supplies Secretary Purushottam Ojha had nothing new to say at the meeting.



"There is scarcity because we are selling petroleum products at much less prices than what we pay while importing. As this has been going on for almost a year, NOC today has no money to finance import even as MoF has already issued it loans of over Rs 12 billion," said Ojha.



Till a week ago, NOC was saying there exists only two options to manage supplies - either raise retail prices or arrange more loans to the corporation for normalizing imports.



But after the students resisted last week´s price hike and the government responded by lowering the prices on Wednesday, NOC Deputy Chief Acharya said now there exists only one option for the government to manage the supply and that is to give more money to NOC to finance imports.



Officials attributed the present mess to soaring international prices of petroleum products.



However, Dr Tilak Rawal, another lawmaker, put the blame on the government because it over the years left the much-needed petroleum sector reforms on the backburner.



"The worst part of the story is that all of us know what we need to do. But fearing of political risks, we have done only patch-up work so far. This will not work," he said.

Lawmakers who spoke at the meeting admitted there is only one solution to sustainably deal with the problem, and that is, adjust domestic oil prices in line with international rates.



"First, the state must have a clear policy on how it will manage oil prices and possible losses," Shah said. Second, the government must enforce the automatic pricing mechanism and offer well-targeted relief package to the needy people, if required.



Third, the government must reform NOC to make it more professional and competent. Fourth, the government must invite private sector into oil business and create competitive environment so that consumers can benefit on quality and pricing.



However, as all those reform proposals, which were repeatedly pushed by multiple high-level commissions, have been consistently ignored by the government, NOC is presently suffering a loss of Rs 1.26 billion a month.



Its buffer stock holds less than 25 percent of its total storage capacity. Its daily distribution does not fulfill even the normal demand, which stands at 300 KL for petrol and 550 KL for diesel in the Kathmandu valley.



As a result, most of the pumps are dry and long queues are seen at almost all pumps retailing petroleum products. This has been going on for more a month.



"We are presently suffering a net fund deficit of Rs 310 million a week. Unless the government addresses this, the supply will only deteriorate further," declared Acharya at FLRC.



MoF Joint Secretary Khum Raj Punjali informed his ministry on Thursday has principally agreed to provide Rs 250 million to NOC for now. But he also added MoF is not in a position to commit additional finances to NOC as it is the middle of the fiscal year and the government has not made allocations for financing oil imports.



Such straight-forward statement from MoF officials spells out clear warnings for consumers. Still, FLRC meeting failed to make any specific recommendations for the government.


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