FM says development budget would be curtailed if oil price not increased
Finance Minister Ram Sharan Mahat has said if the price of the petroleum products is not increased, the government would be compelled to curtail the its grants to village and district development committees in order to continue with the subsidy on oil.
“Losses on petro-products have skyrocketed. The country cannot bear it anymore. If the money is disbursed to the Nepal Oil Corporation (NOC) without increasing the price of petro products we will have to cut down on development budget,” Minister Mahat told media-persons, adding, “it would be difficult even to pay the increased salary to the civil servants.” NOC has requested Rs. 2 billion from the finance ministry to ensure the smooth supply of petroleum products without hiking its price. However, the ministry has declined NOC’s request.
Finance Minister Mahat said that the NOC losses should be brought to zero while reviewing the prices. “The selling price of the petroleum products should not be less than the purchase price,” he said, “it should reach break even.”
By selling the expensive oil cheaply NOC is currently incurring a loss of Rs 260 million every month. nepalnews.com ag Sep 15 07
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