Minister Badu: Petroleum prices increase due to hike in international market

Minister for Industry, Commerce and Supplies, Dilendra Prasad Badu, has said the price of petroleum products in Nepal has to be increased due to its rising prices in the international market.

Informing the House of the reason for the rise of petroleum products in a meeting of the National Assembly today, the Minister said an automated price system for petroleum products has been implemented in the country since 2071 BS and the rise and fall of petroleum prices is being determined accordingly.

He said, “Lately Nepal is getting the increased price list of petroleum products each time due to a special energy crisis following the ongoing Russia-Ukraine war. Instead of crude oil, the Nepal Oil Corporation (NOC) directly purchases refined oil from the international market.” He also took time to inform the House that NOC business was at the loss at present due to skyrocketing prices of petroleum products in the international market.

The prices of petro products are gradually rising in the international market lately and till June 14 NOC losses were around Rs 50 billion and its due to its exporter, Indian Oil Corporation, was Rs 22 billion, according to the Minister.

"I want to inform this session that the price of petroleum products had to be increased due to the compulsion to adjust the prices at a par with the cost price so that the dues to be paid to the Indian Oil Corporation for purchasing petroleum products does not add up and in order to make the supply system smooth," the Supplies Minister explained.

He also made it clear that the petroleum products were being sold and distributed as per the existing related laws and policies of Nepal Oil Corporation (NOC).

"The NOC's Thankot depot has sold 750 thousand litres of petrol and 850 thousand litres of diesel on June 19 in the Kathmandu Valley where the largest volume of petroleum products is consumed throughout the country. Similarly, it sold 840 thousand litres of petrol and one million 40 thousand litres of diesel on June 20. The petroleum products have been sold by determining the price in consonance with the laws and policies and not with the intention of profiteering any entity or any person," the Minister said in response to the lawmakers' suspicion that the NOC had hoarded the petroleum products and hiked their prices.

He said it is not true that the price of petroleum products was hiked after NOC supplied the previous stock to the dealers.

Minister Badu informed that a high-level task force has been formed to study and present a report on the short and long-term policy, legal and institutional reforms for making the supply system of petroleum products and LP gas smooth, systematic, transparent and effective in Nepal.

He also gave assurances that the market monitoring would be made further effective, systematic and vigorous.