July 4: Nepal Oil Corporation (NOC) has no money to buy fuel and has arrears of Rs 30 billion. Meanwhile, NOC has submitted a proposal to the government to reduce the consumption of petroleum products.
The state-owned company on Monday suggested the Prime Minister's Office, the Ministry of Industry, Commerce and Supplies and the Ministry of Home Affairs to tighten the sale and distribution of petroleum products through quota system.
Suggestions range from setting quotas for the sale of petroleum products to increasing the use of electricity as an alternative to petrol. NOC has suggested reducing the consumption of petroleum products which means cutting down its own business.
The corporation suggested that petrol pumps should introduce a policy of giving 5 litres of fuel to motorcycles at a time and 20 litres of fuel to small vehicles like cars and jeeps.
The corporation expects that the consumption of petroleum products will be reduced if the government implements its recommendations.
NOC maintained that the price of petroleum products in Nepal is high due to the rise in prices in the world market. There are indications that this will increase inflation and bring problems to the economy. Billions of rupees have been spent on fuel imports. The corporation is selling petrol at a loss of Rs 31 per litre and diesel at a loss of Rs 47. The government has not given any special grant. The corporation says it does not have enough money to buy petrol as per the country’s demand.
NOC's deficit has reached over Rs 50 billion as of May this year. In addition, more than Rs 30 billion remains to be paid to Indian Oil Corporation for the purchase of petroleum products. NOC does not have the money to clear its dues.
Due to these reasons, the NOC is in an awkward situation. NOC spokesperson Binit Mani Upadhyaya said that the situation will become more complicated if the consumption of petroleum products is not reduced.
"The situation is very complicated. Indian Oil Corporation has been demanding payment of dues. We have not been able to clear the dues in lack of money,” he said.
The corporation has suggested enforcing the quota system on government and private vehicles instead of public vehicles and those providing essential services. NOC has also emphasized increasing the use of electric vehicles.
For this, the corporation has suggested setting up free charging stations in major cities and national highways and setting up separate parking lots for electric vehicles in public and private parking lots. NOC is confident that this will increase the use of electric vehicles and reduce the consumption of petroleum products.