Knowledgeable sources involved in the petroleum trade said such unfair trading has been going on through nexus between fuel station operators, Nepal Oil Corporation (NOC) officials and industry managers. This, they say, has been going on since NOC introduced dual pricing a few months ago without creating a proper control mechanism.[break]
Under the differential pricing, NOC has set the price of diesel for industrial consumers at Rs 95 per liter, but has been supplying fuel to pumps at lower rate so that it could be retailed at Rs 88 per liter. The rate includes commission of well over Rs 2.50 to pump owners on the sale of each liter of diesel.
However, two sources at the corporation informed Republica that of the 350 kiloliters of diesel that NOC issued to the petrol pumps in Morang on Friday, more than 80 KL found its way into the industries. “And those were sold at Rs 92 per liter, which benefited industries because the price was Rs 3 cheaper than industrial rate and also brought cheers to pump owners because it fetched them extra profit,” said a source.
He even disclosed that the extra profit earned this way does not go into the pockets of dealers alone, but is shared with senior NOC officials and even reaches senior officials at Ministry of Commerce and Supplies (MoCS).
“To be precise, of the extra four rupee per liter earned from this unfair deal, Rs 1.50 goes into the pocket of NOC officials and remaining Rs 2.50 is kept by the fuel station operators,” said the source.
As fuel stations supply diesel to industries in tankers of 20 KL capacity, diversion of each tanker of diesel to industry fetches Rs 30,000 to the NOC officials and Rs 50,000 to the pump owners. “Such a hefty profit to pump owners is on top of the official profit margin,” said the source.
The foul play has been creating a “win-win” situation for dealers, NOC officials as well as industries, but hurting fuel availability in the market.
“If our calculations are right, each dealer engaged in this unfair act is making extra income of around Rs 300,000 every month,” said a petroleum dealer.
On being queried, Dipak Baral, Chief of NOC depot in Biratnagar, admitted foul play by the fuel station operators. “We have received numerous complaints of pumps selling diesel meant for local sales to the industries,” he stated. “But allegations that NOC officials are engaged in such deal is totally false,” he told Republica.
Despite Dahal´s denial, sources said pumps supply the fuel to the industries by diverting the tankers receiving diesel from NOC to industries.
“The NOC records show the pumps of taking enough diesel for retail sales, but monitoring of the market shows that they have not been supplying fuel to general consumers,” said Uttam Dhungel, president of Public Forum, Morang, an organization working for consumer rights.
Records at the corporation shows, there are industries in Morang-Sunsari corridor that take as much as 60 KL of diesel a day to avoid power scarcity. However, distribution pattern shows, the corporation sells only around 25 percent of its total daily supplies to the industries.
“This effectively has left industries starving for diesel. No wonder, such unfair play is going on in the market,” said the source, adding that petroleum dealers are presently diverting some 60 percent of total supply made for retailing through pumps to the industries.
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