January 4: Nepal Oil Corporation (NOC) has been determining the consumer prices of petroleum products after including the costs under 9 different headings.

According to the NOC, customs duty, road maintenance and improvement tax, infrastructure development tax, value-added tax (VAT), various other taxes under the heading of environment, transportation cost of tanker from Indian Oil Corporation's depot to NOC depot and insurance expenses, technical loss, corporation's administrative expenses, and dealers' commission among others are added to determine the fuel prices for the consumers.

Nagendra Shah, acting deputy executive director of NOC, said that the consumer price is determined only after adding the costs under these headings. NOC has to pay Rs 25 per liter for customs duty on petrol, Rs 4 per liter for road maintenance fee, Rs 10 per liter for infrastructure development tax, Rs 1.36 for price stabilization fund and Rs 1.50 for environment fee. Similarly, value-added tax (VAT) is Rs 15.65. The total taxes that NOC pays for a litre of petrol is Rs 57.73 per liter. Considering the volume of petrol imported, NOC has to pay Rs 680 million per month as

Likewise, NOC pays Rs 40.41 per liter under the same headings for a litre of diesel. The monthly taxes for diesel is Rs 820 million. Similarly, the NOC has to pay Rs 20.30 for a liter of kerosene or Rs 30 million per month, Rs 40 million per month for aviation fuel, and Rs 2.30 billion per month for cooking gas (LPG).

NOC has been paying Rs 12 billion to the government. As per the price list of IOC, NOC purchases petrol at Rs 76.48 per litre and adds the taxes of Rs 57.73 and other costs and sells petrol at Rs 136 per litre. Similarly, it distributes diesel at Rs 119 per litre after purchasing it for Rs 73.68 per litre from India.

Shah argues that the cost incurred by NOC is more than the current market price of petroleum products. He argues that petrol costs Rs 146.50 per litre and diesel Rs 123.545 per litre.

NOC says that the biggest loss is from the sales of cooking gas. The corporation has been incurring a monthly loss of Rs 2.30 billion on cooking gas at the rate of Rs 647 per cylinder.