A board meeting of the corporation took the decision to this regards on Tuesday morning and enforced the new rates with immediate effect. Customers in the Kathmandu Valley will now need to pay Rs 93 per liter of diesel as well as kerosene.[break]
“The decision has narrowed down our loss and has placed us in a relatively better position to manage our fund flow. We will now be able to better manage the supplies,” said NOC Spokesperson Mukunda Dhungel.
According to NOC, the Tuesday´s price hike has enabled it to lower its loss on diesel to Rs 1.20 per liter from previous gap of more than five rupees. Likewise, as the corporation was already making profit on kerosene trade, the raise has increased its profit margin on this product to Rs 8.45 per liter.
However, as the corporation has still not raised the price of liquefied petroleum gas (LPG), on which it was suffering a loss of Rs 453 per cylinder (of 14.2 kgs) of gas, Dhungel said the corporation still continues to incur a loss of Rs 130.1 million this month.
Officials at the NOC as well as Ministry of Commerce and Supplies have been pushing the government to revise the prices of LPG upward, as a large chunk, almost 40 percent, of LPG imports is consumed by commercial ventures like hotels, restaurants, factories and automotive sector.
However, the government continues to turn a deaf ear because of fears it could spark protests from household consumers , particularly students.
In order to make up for the loss on LPG, the government instead has allowed corporation reap a profit of Rs 11.88 on a liter of petrol, Rs 15.84 on a liter of aviation fuel supplied to domestic airlines and Rs 27.23 per liter of aviation fuel supplied to the international flights.
Moreover, officials said the fund flow of the corporation could turn better as crude oil price has further dropped in futures trading for July. However, they noted consumers might not actually enjoy a benefit because the corporation has well over Rs 26 billion in loans to settle to the government and different financial institutions. NOC had taken the loans to finance its imports.
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