Nepal Oil Corporation (NOC) has announced that Indian Oil Corporation (IOC) has diverted the payment it made last week for fresh supplies to settle outstanding bills of March. “This has thrown cold water on our efforts to step up imports for the time being,” said a source.[break]
Records of NOC shows, it has so far paid Rs 5.92 billion (IRs 3.70 billion) to the Indian supplier in April, burning Rs 1.5 billion that the government lent to it. “But as IOC diverted Rs 1.25 billion (IRs 780 million) of that amount to settle March´s outstanding dues, our position still remains vulnerable,” said the source.
NOC last week had announced that it might be able to ease supplies with payments it was planning to make by the weekend. IOC´s move has freed NOC from outstanding dues though. But it has left NOC with no option but to depend on yet another tranche of government loans to import normal volume and end scarcity.
The announcement, meanwhile, has irked consumers who have been braving long queues to get hold of fuel from the past two weeks.
Scarcity had hit market after IOC cut export to Nepal by one-third, taking firm stance that it will supply as much fuel as NOC´s payment supports. Following the cut in import, NOC, which is suffering a monthly of loss of Rs 1.96 billion and not in a position to pay enough to IOC, too had curtailed supplies in the market. As a result, most of the petrol pumps in the Valley remained dry on Sunday as well and long queues of vehicles were seen in refilling stations distributing fuel.
NOC, moreover, disclosed that it has recouped Rs 1.52 billion (IRs 850 million) from the market from the sales over the past couple of weeks. “We will pay it to IOC on Monday. But clearly, that will not help enough to end scarcity,” said NOC Spokesperson Mukunda Dhungel.
He told Republica that improvement in fuel availability will depend on how early the government disburses fresh loans it has committed to NOC again.
“The Ministry of Finance has responded positively to our request for fresh loans of Rs 1.76 billion. We hope to get a clear answer in a few days,” said Dhungel.
Though NOC had pushed for raising prices of petrol by Rs 10 per liter, diesel by Rs 8 per liter and liquefied petroleum gas by Rs 100 per cylinder (of 14.2 kg), the government has continued to turn deaf ears to it.
NOC has already suffered loss of over Rs 6 billion so far this fiscal year. Moreover, the government has already issued it loans of over Rs 4.50 billion to finance imports.
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