Nepal Oil Corporation (NOC) that received new price list for the month of April from the Indian supplier -- Indian Oil Corporation (IOC) -- on Thursday announced that buying rates of all major petroleum products have jumped, raising the corporation´s losses to Rs 250 million a month. [break]
“More worrisome is that the loss from the cooking gas alone has jumped to about Rs 200 million,” said NOC Chief Digambhar Jha. “This has created a serious pressure on us to raise the prices.”
At present, consumer price for LPG is Rs 1,250 per cylinder. But at this price, officials said the corporation´s loss on it has jumped to Rs 183 per cylinder.
Although a fuel of relatively better off families, the government has always been providing subsidy on LPG. Experts have long tagged it as a gross misuse of the scarce state resource, but NOC was satisfied with the move because LPG had been enabling it to replace kerosene, a product on which NOC was incurring huge losses in the past.
But officials now are pushing for the change in this policy. “The subsidy has rendered LPG cheaper than kerosene and any other petroleum products. Because of this, people and factories are using it for purposes like operating geyser, generators and factories, leading to a sharp rise in its consumption,” said a source.
Presently, NOC is selling kerosene and diesel at Rs 61 per liter, whereas the price of a liter of LPG stands at a mere Rs 51. Because of it, demand of LPG has now soared to 16,000 tons, whereas till December 2009, it was 12,000 tons a month.
“We cannot let this happen now. It is not sustainable,” Jha said.
Apart from LPG, Jha told myrepublica.com that April 1 import pricing from IOC has inflicted the corporation a loss of 10 paisa on a liter of petrol and Rs 3.20 on diesel as well. The corporation is still earning a decent profit on kerosene and aviation fuel.
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