IOC cuts down on supply, NOC seeks Rs 1.5b from govt

KATHMANDU, Sept 18: Despite Nepal Oil Corporation´s (NOC) request for uninterrupted supply, India has cut supply of petroleum products to Nepal by 30 percent demanding the corporation to first clear outstanding dues.



The corporation has about Rs 400 million to pay to the Indian Oil Corporation (IOC) for the supply made last month. [break]



The IOC suddenly cut down on the supply for Nepal on Friday, said NOC Spokesperson Mukunda Dhungel. However, he added that IOC has agreed to resume normal supplies after NOC committed to release the payment at the earliest.



Nepal consumes around 4,000 kiloliters of petroleum petroleum products a day and during the festive season, the figure jumps by about 15 percent.



NOC said the latest import price (issued by IOC on September 16) has jacked up its loss by over Rs 200 million to Rs 705.80 million for September, and it has yet again asked the government for additional finances to ensure uninterrupted import.



"We have requested the government to release Rs 1.50 billion, saying it is necessary to ensure normal imports and maintain regular supply in the market during festive season," said Dhungel.



Earlier, the bankrupt corporation had said it would manage the finances for imports by taking loans from the corporation.



"Now, it decided to push the government for the fund mainly because it understands the government cannot compromise on supplies during major festive seasons and will soften its stance," said an official at the Ministry of Finance (MoF). So far, the new government had denied fresh loans to NOC.



The corporation officials said the government has now relatively softened its stance. "However, MoF has put a rider to cut down on temporary staff for providing the loans," said a source.



MoF has mainly sought the corporation to lay off the temporary staff that got jobs not because the corporation needed them but because the previous Commerce and Supply Minister Rajendra Mahato and NOC Managing Director Digambhar Jha wanted to give them employment.



Dhungel, meanwhile, said the corporation is currently carrying out a study on the number of staff that the corporation needs and would lay off unnecessary temporary workforce.

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