‘Do something, anything to end fuel shortage’

‘Do something, anything to end fuel shortage’
eKantipur, 18-Apr-08

The government should come up with new strategies to end the perennial problem of petroleum scarcity, said officials and trade unionists.

“A solution should be found to prevent fuel shortages in the coming days,” said Baburam Rai, president of the Nepal National Employees Association, Nepal Oil Corporation (NOC) section. “The government is funding the NOC from the budget set aside for development projects. This can't last forever,” added the chief of the Maoist-affiliated trade union.

Rai was speaking at a program entitled “NOC's present status and prospects” organized by the union on Friday as part of its Save the NOC Campaign. He said that if there were other alternatives, they should be explored. If jacking up prices is the only solution, the government should say so, he added.

Purushottam Ojha, secretary of the Ministry of Industry, Commerce and Supplies, said serious reforms should be carried out at the ailing corporation to turn it around.

“The NOC's leakage and technical losses should be minimized,” he said. “Depots should be modernized, and oil transportation costs must be brought down.”

Citing an example of Bangladesh which buys petroleum at cheaper rates from Kuwait in return for its workforce's contribution to the economy, he said Nepal needed to make diplomatic efforts and lobby for similar benefits. “The NOC should develop human resources to deal with such matters,” he said.

Secretary Ojha said that the NOC's losses were mounting because of expanding demand at a time when world oil prices were soaring. He added that the NOC was incurring a deficit of Rs 1.35 billion every month.

Following a series of record highs, oil was traded at above US$ 115 a barrel on the international market on Friday.

The NOC owes Rs 10.69 billion to the government and varied financial institutions. The government has already provided the NOC a soft loan of Rs 3 billion to cover its losses. A source said the NOC was asking for another Rs 500 million from the government to pay its Indian supplier.

The corporation loses Rs 22.53 on the sale of every liter of diesel, Rs 5.84 on every liter of petrol and Rs 16.67 on every liter of kerosene. Likewise, its sales price per cylinder of cooking gas is Rs 352 less than its cost price.