NOC not to reduce price, blames FM for not compensating loss
Prices of crude oil have declined significantly in the international market for the last couple of weeks and India has started supplying fuel to Nepal at a reduced rate for over a month. But Nepal Oil Corporation has not reduced the price of fuel in Nepal. Instead, it said it would not cut the price unless it could make up for the loss it suffered over the months.
The price of crude oil which climbed to USD 123.58 per barrel on March 8 dropped to USD 94 per barrel this week. The Nepal Oil Corporation (NOC) has received a new price list from the Indian Oil Corporation twice, reducing the prices of diesel and petrol (supplied to Nepal) by Rs. 30 per litre in a month.
However, the NOC has decided not to adjust the prices of petroleum products this time.
Even though IOC has sent the price list with a significant reduction, the Corporation will not adjust the price immediately as the corporation is still in a huge loss and has to pay millions of rupees as dues to the Indian Oil Corporation (IOC), said the NOC sources. According to the latest price list received from Indian Oil Corporation, the Corporation is making a profit of Rs. 2.78 per litre on petrol. It is also making a profit in kerosene and aviation fuel.
However, NOC said it is still facing a loss of Rs. 9.37 per liter in diesel and Rs. 499.57 in a cylinder of cooking gas. Citing these reasons, the Corporation said that it would not adjust the price of petroleum products immediately.
The NOC has reportedly been incurring a loss of over Rs. 1.2 billion a month from the sale of petroleum products.
It is said that the NOC was ready to cut the price but when Finance Minister Janardan Sharma denied compensating the loss, the NOC decided not to cut the price until it makes up the losses incurred in the last six months.
The NOC still has to pay Rs. 23 billion to IOC for the fuel it imported. Currently, the NOC is selling a litre of petrol at Rs. 181, diesel and kerosene each at Rs. 172 and LPG at Rs. 1,800 per cylinder.
Earlier, the NOC had adjusted fuel prices 14 times from January 2022. The price of fuel started to increase in the international market after Russia attacked Ukraine in the last week of February.