Thursday Dec 8, 2022
Thursday Dec 8, 2022

Privatization of oil corporation rumor or reality?

2022 Jul 31, 18:22,
A notice telling people to stay 2 metres apart is seen at a petrol station, following the outbreak of the coronavirus disease (COVID-19), Stone, Britain, April 28, 2020. (Image via REUTERS)

The rise and fall in the price of petroleum products in Nepal is an old issue. The impact of this price increase will also affect other areas here. Therefore, this price increase is always a topic of discussion from the parliament to the street.

The increase in the price of petroleum products has a direct impact on many sectors, so when there is a general decrease, it heats up the market. The huge increase in petroleum products in the world market naturally also touched Nepal. That's why the price of petroleum products in Nepal also increased rapidly. In order to give relief to the citizens, the government has repeatedly announced tax exemptions. Lately, the price of fuel has come down from India, but Nepal Oil Corporation Ltd. has been widely criticized for not adjusting the price this time, indicating that the loss is still there.

According to the corporation, there is a loss of 14 rupees 19 paise per liter in petrol, 21 rupees 93 paise in diesel and 582 rupees 42 paise in gas. According to the corporation, there is a monthly loss of 4 billion 32 million rupees. As the discussion that the corporation will be privatized came out, suspicion arose everywhere. After the matter touched the parliamentarians as well, an intensive discussion was held today in the Industry and Commerce and Labor and Consumer Affairs Committee of the House of Representatives. Industry, Commerce and Supply Minister Dilendra Prasad Badu, Secretary Arjun Prasad Pokharel and Nepal Oil Corporation Limited Executive Director Engineer Umesh Prasad Thani participated in it.

Nar Bahadur Dhami, a member of the committee, asked why the price was not adjusted in Nepal when the price of fuel fell in the international market, what is the issue of privatizing the corporation, is there a need to restructure the corporation or not? He asked questions and so on. Another member of the committee, Gopal Bahadur Bam, asked, "People are angry about fuel distribution, what is the matter to satisfy them?" The government and the oil corporation should pay attention to that."

He also requested to solve the problem whether it is through tax exemption or any other measures and to create an environment where fuel can be easily obtained even in the difficult areas of western Nepal. Another member, Pramod Shah, also questioned the fact that the corporation did not reduce the price due to the decrease in funds from outside. Another member, Prakash Rasaili, mentioned that even though it was announced that the government had reduced taxes, the people did not realize it. Members Rameshwar Rai Yadav, Sarita Kumari Giri and others raised serious questions about the fuel supply system and the relief provided by the government.

Industry, Commerce and Supply Minister Badu informed the committee that when the price of fuel reached 209 per liter, the tax was reduced by Rs. "Government and corporation have distributed fuel at a low price due to losses, the government has helped the corporation by giving subsidies, the government is serious about not letting the people die", said Minister Badu in reply.

He said that he has focused on making the corporation's activities transparent by making the past history public and that he has studied the previous study reports. He clarified that it is wrong for the government to give fuel to the private sector. "The new law that will be made after taking the opinion of the consumer and also discussing it in the parliamentary committee will decide whether to give it to the private sector or not, confusion has been spread in a misleading and irresponsible way", he added.

He also informed that after studying all the reports, he proceeded with the improvement plan. He also informed that a committee has been formed under the leadership of Vishwanath Poudel, Vice Chairman of Planning Commission, with the aim of ensuring that the people get fuel at the right price and provide easy supply. He also informed that a new Petroleum Act will be made as soon as the committee's report comes out. He has urged to increase the use of electricity while reducing fuel consumption.

Secretary Arjun Prasad Pokharel mentioned that the easy, regular and quality supply of fuel is important and said that the attention of the ministry is towards that. In response to the questions of the members of the committee, Thani, the executive director of the corporation, informed that a high-level study task force was formed for the supply system of petroleum products and institutional reform of Nepal Oil Corporation under the leadership of Vice Chairman of the National Planning Commission, Vishwanath Paudel, in the cabinet meeting held on May 10. He said that there was no question of entrusting the sales and distribution to the private sector and it was just a rumor that came out.

The chairman of the committee, Bimal Prasad Srivastava, expressed serious concern that the oil corporation would be weakened because the government would not refund the tax due but the corporation would have to keep the land and take loans.

After the meeting, he told the government that only by discussing the various study reports prepared earlier on the various issues of the corporation and the report prepared by the committee headed by the Vice Chairman of the Planning Commission, Poudel, will give necessary instructions to the government. He also informed that he has instructed the government to discuss the problems of sugarcane farmers with the organizations and representatives concerned with the farmers and come to a conclusion.

This is the current situation of buying and selling fuel

Engineer Thani, Executive Director of Nepal Oil Corporation Limited, informed the committee about the current situation of fuel supply. As of today, petrol is being sold at Rs 181 per liter and diesel at Rs 172 per liter. According to him, the cost of purchase (e


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