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| Kathmandu, Wednesday October 30, 2002 Kartik 13, 2059. |
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NOC in dire need of Rs 1.5b to
buy oil
Post Report
KATHMANDU, Oct 29:Following a massive loss due
to disparity in import price, Nepal Oil Corporation, the state-owned monopoly in the
imports of petroleum products, has asked the government for Rs 1.5 billion for importing
petroleum product for the month of November.
"The NOC, in its formal request submitted
at the ministry, has asked for the sum to secure the petroleum supply for the next month
due to its rapid depletion in its fund," said sources at the Ministry of Industry,
Commerce and Supplies (MoICS).
The amount sought by the corporation is for
settling the import account for the month of November, which needs to be cleared by
mid-December and also for importing the crude oil from the international market. According
to sources, currently the NOC has a fund of Rs 1.15 billion only, while it needs to pay Rs
1.75 billion to import oil alone to the Indian Oil Corporation (IOC).
"The corporation’s fund is short by Rs
600 million for settling the import’s value, although the figure might change
depending on the revenue collected from the sales during the month of November," he
added. The NOC’s monthly revenue generated from the sales stands at Rs 900 million
maximally.
Besides, it has a due of some Rs 300 million to
be cleared to the IOC apart from other dues like clearance of duties which further crosses
over Rs 300 million mark, according to the source. He also informed that the corporation’s
past financial records are currently being audited and this is likely to fuel its
liability in the form of bonus to the employees for the profit it generated during the
previous years.
"If not the whole of the requested amount,
the NOC has sought immediate releasing of at least Rs 600 million needed for the petroleum
imports," the source added. The latest mess in one of the strongest public
enterprises in terms of financial status has cropped up in the wake of deregulation of
administered pricing mechanism in India in April.
While the petroleum price in India has been
shooting up to maintain the import price parity every fortnightly, Nepal has been losing
to a constant price since last couple of years. "This has resulted in founder in the
financial status of the NOC," said officials.
Owing to the price difference with the supplier
across the border, with price being on a lower side in Nepal, the NOC had been claiming of
incurring a loss of over Rs 10 million a day and a massive outflow of kerosene, the
heavily subsidised principal household fuel. The loss is said to have soared to Rs 20
million per day from this month due to rise in the price of kerosene in the international
market.
Although sales of petrol yields a profit of Rs 5
per litre, the NOC is incurring a loss of Rs 8 per litre of kerosene and Rs 6 per litre of
diesel. This has been widening the gap on cross-subsidisation, resulting in a whopping
loss for the corporation.
The NOC has been adjusting the losses it
incurred from its fund and the officials had warned of possible inability of importing
petroleum products with its own fund if the loss continued.
They also argued that the government, which
shares the profit of the corporation in good days, must come to its assistance at the time
of adversity. "The government must raise the petroleum price or bear loss," they
stated.
Perceiving this possible threat, a Petroleum
Price Review Committee (PPRC) formed by the government, in its report submitted to the
government a couple of months back, had presented the government with three alternatives
to deal with the problem. It had basically recommended for increasing the price making it
on a par with price across the border. However, the recommendations have not been
implemented as of now, the officials lamented.
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