October 4: The prices of petroleum products in neighboring India has reached a record high with a price hike of 25 paisa and 30 paisa for a litre of petrol and diesel respectively. In the wake of the price hike in the Indian market, Nepal Oil Corporation (NOC) is concerned that its losses on petroleum products will further go up to Rs 1.5 billion. 

With the increase in price in India, petrol is being sold for IRs 102.39 per litre in Delhi and IRs 108.43 in Mumbai.  Likewise, the price of diesel in Delhi has gone up to IRs 90.77 per litre and IRs 98.48 per liter in Mumbai, as per the Times of India. In India, prices vary from one state to another due to the different taxes levied by the state gvernments. 

Nepal Oil Corporation (NOC) has already received the new price list from Indian Oil Corporation (IOC). In a period of fifteen days, NOC estimates that it would incur loss of Rs 1.5 billion.

When the new price sent by IOC is adjusted along with the tax and other various costs, NOC has to pay Rs 139.18 for a liter of petrol, Rs 120.01 for a litre of diesel, Rs 93.94 for a litre of kerosene, Rs 84.07 for domestic aviation fuel and Rs 76.44 for fuel used for international flights. Likewise, cooking gas costs Rs 1,961.88 per cylinder.

The corporation had last adjusted the price of petroleum products on August 23. With the adjusted prices, petrol costs Rs 130, diesel and kerosene costs Rs 113, domestic aviation fuel costs Rs 86 and cooking gas costs Rs 1450. Considering this price, NOC incurs a loss of Rs 9.18 per liter on petrol, Rs 7.01 on diesel, while it earns a profit of Rs 19.59 on kerosene, Rs 1.93 on domestic aviation fuel and Rs 15.10 on international aviation fuel. NOC says that it is facing a loss of Rs 511.88 per cylinder.

According to Binit Mani Upadhyaya, spokesperson of the NOC, the demand for kerosene and aviation fuel is relatively low and the demand for petrol, diesel and cooking gas is high. So NOC incurs loss of Rs 1.5 billion in fifteen days by selling the petroleum products at the above mentioned prices. 

The price of crude oil has reached around $80 in the international market. Upadhyaya said that the loss of NOC will increase along with the increase in the prices of crude oil