Thursday, 24th April 2014

Implement auto price mechanism: NOC

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The Nepal Oil Corporation (NOC) has asked the government to implement auto price mechanism in petroleum products, threatening that the country may face another petroleum shortage otherwise.

Organising a press conference in Kathmandu on Friday, NOC officials said that considering the financial health of the cooperation, it is the need of the hour to implement auto price mechanism.

“The corporation is suffering an economic crisis by selling petroleum products at a price lower than the cost,” said Jayaram Acharya, officiating executive director of NOC. “The corporation is supplying fuel in losses considering its’ responsibility towards the consumers. But we cannot supply fuel regularly forever like this.”

Acharya added that the corporation cannot continue to supply fuel by taking loan, adding that either the government should provide assistance as per its losses or allow the price to equal the cost.  

The corporation’s loan has reached Rs.33.66 billion and accumulated loss stands at Rs. 27 billion. It is paying around Rs. 250 million in loan interests per month. NOC has also been paying Rs. 2.01 billion to the government as revenue per month.

In the conference, officials also requested the government to allow the private sector to sell the Liquefied Petroleum Gas (LPG).

As per the latest price structure received from Indian Oil Corporation (IOC), the corporation is facing a loss of Rs.1.35 billion in December. The losses will increase in the month of January because the price of fuel has already increased in the international market.