Petrol reaches Rs 80 per liter

Petrol reaches Rs 80 per liter
eKantipur.com, 26-Dec-07

The government has raised the consumer price of petrol to Rs 80 per liter, up by Rs 7 per liter.

Nepal Oil Corporation (NOC), with approval from the Ministry of Supplies, adjusted the petroleum prices with effect from Wednesday. The prices of other petroleum products have not been changed.

"We have increased the wholesale rate for Kathmandu to Rs 76.44 per liter," said NOC chief Digambar Jha. On the basis of this rate, Nepal Petroleum Dealers Association (NPDA) has fixed the retail price of petrol at Rs 80 per liter in Kathmandu.

"For Biratnagar and Pokhara, it has been fixed at Rs 79.75, while for Birgunj, Nepalgunj and Dipayal, it is Rs 78.75, Rs 80 and Rs 82.25 respectively," said NPDA president Shiva Prasad Ghimire.

Talking to the Post, a senior Supplies Ministry official said prices were raised as part of the comprehensive fund management and reform package the government was pushing to sort out long-running losses and the subsequent fuel crisis.

With the new rates, NOC would earn a profit of over Rs 2 per liter of petrol, said Jha. It would effectively cut NOC's loss by about Rs 79 million. With this adjustment the monthly loss for NOC would come down to Rs 532 million.

"In the next phase, a decision will be taken on the price of cooking gas," said Jha.

He elaborated that a NOC board meeting today also approved two plans of action to reform petroleum pricing --first, deregulate the price of cooking gas, and second, provide direct cash subsidy on kerosene to students, workers, victims of Janaandolan II and the poor.

Under the first plan, NOC has proposed introduction of two different types of cylinders for commercial and household consumption and differential prices for them.

Both these plans have been worked out as per the latest recommendation of the Finance Ministry to instantly open up the price of cooking gas and petrol and gradually adjust the prices of kerosene and diesel.

With fresh liberalization initiatives, Supplies Ministry officials expressed hope that the Finance Ministry would move ahead with its plan to issue petroleum bonds of Rs 3 billion. The bond issue has been mooted to address the immediate cash crunch at NOC.

The bond issue has been pushed to enable NOC to clear outstanding dues to Indian Oil Corporation and finance future imports and end the fuel crisis.