Fuel crisis to get worse: Stocks enough only for two days

Fuel crisis to get worse: Stocks enough only for two days
ekantipur, 28-Jul-08

The Nepal Oil Corporation (NOC), which has curtailed petroleum supplies citing that it has not been able to pay for adequate imports, has warned that its fuel stock has alarmingly shrunk and is just enough to support two day's demand.

“Our stock has dropped to 15,000 Kiloliters (KL), and of that that about 9,000 KL is dead stock which cannot be pumped out,” said NOC Chief Digambhar Jha, informing the Post that the corporation has no diesel stock at Thankot depot, and stock of petrol is also depleting fast.

The corporation officials attributed the problem to shortfall in imports in the past and further reduction in supply by the Indian supplier to 1,000 KL a day, which is a third of the country's daily demand.

“Despite seeking support from all quarters, we could not manage enough funds to import more than 50 percent of our requirements this month,” Jha said.

NOC records show the corporation, which released the final monthly installment to the Indian Oil Corporation (IOC) Monday, paid Rs 2.83 billion to the Indian supplier in July. To meet the domestic demand, it was required to pay Rs 5.44 billion.

As a result, the corporation has largely lowered supplies in the market, creating a severe fuel crisis in the country. That has closed down 90 percent retailing stations and affected vehicular movement.

According to the transport entrepreneurs' federation, the number of vehicles plying on the road has gone down to a third due to fuel shortage, while passengers have been are forced to travel packed in the few operating buses and three-wheelers (tempos).

Cautioning the government of the looming disaster, the corporation has requested the Ministry of Finance to facilitate an early release of Rs 700 million, which the government decided to give to it last week.

“The delay in the release of the promised funds has limited our import capacity,” said Jha. He added that the corporation has also sought the government to refund the value added tax (VAT) that it has been paying. Given that the VAT paid at import point is higher than that realized from retails due to import-sales prices differences, NOC has claimed Rs 840 million from the government for the last fiscal year.

“It is our due demand, and we have also asked the government to give it as soon as possible,” said Jha adding that consumers, already reeling under a fuel crisis, may face a still worse situation if the government did not act promptly.