Petroleum fuel crisis in the Kathmandu Continues - Business

Petroleum fuel crisis in the Kathmandu Continues

Petrol Chhaina or No Petrol signboard are hanged in almost all pumps in Kathmandu,
Petrol Chhaina or No Petrol signboard are hanged in almost all pumps in Kathmandu,

24 APRIL 2014 – KATHMANDU, NEPAL – Petroleum shortage continues in the capital despite NOC assurances last week which was assured for past Tuesday. Shortage of Petrol has caused many transportation fees hike and created difficult situations for those riding two wheeler.

The two-week-long fuel crisis in the Kathmandu valley has not eased despite government assurances that regular supplies would resume by Tuesday. In fact, motorists can expect the shortage to worsen as Nepal’s supply lines will be cut when the Indian border is sealed for elections there.

Nepal Oil Corporation ( NOC ) had initially cited unpaid import bills for the reduced supplies of gasoline. Now it says that the upcoming Indian polls could disrupt imports. On Tuesday and Wednesday, NOC paid IRs 3.64 billion out of the about IRs 5.90 billion it owes to Indian Oil Corporation (IOC) to keep the tankers rolling. IOC is NOC ’s sole supplier of petroleum products. However, NOC Spokesperson Mukunda Ghimire said that the elections in India may affect petroleum supplies to Nepal despite the partial payment.

India has announced that the Jogbani border adjoining southeastern Nepal will be closed from Tuesday to Friday. NOC said it planned to keep the oil flowing by channeling imports through Kakkarbhitta on the eastern border.

“We are planning to hold adequate stock considering a possible sealing of Raxaul border on May 7,” said Ghimire. Nepal imports about 80 percent of petroleum products from IOC’s Raxual depot.

Amid supply constraints, pumps in Kathmandu have not been able to provide fuel to motorists.

Although the NOC announced on Sunday it would supply additional fuel within the week, petroleum dealers said the supply still fell short of demand. NOC had said it would distribute more than 450kl of petrol against the demand of 400kl.

“The shortage still continues as NOC distributed only 362kl of petrol on Tuesday and Wednesday,” said Lilendra Pradhan, president of Nepal Petroleum Dealers’ National Association.

NOC , however, claimed the supply was increased to 560kl on Wednesday. “And, we will supply 400kl of petrol on Thursday despite being public holiday,” Ghimire said.

There are 108 petrol pumps in the valley, including 11 run by government entities like the police, army and Sajha. Pradhan said about 35 percent of the petroleum supplied to the valley goes to pumps run by the government.

Meanwhile, diesel is also in short supply in the valley. Pradhan said they were getting only 500kl of diesel against the daily demand of 600kl.

Due to unmatched pricing system of the NOC and government has to suffer by subsidizing the fuel, NOC has loosing millions of rupees every year, there are many causes such as unchanged exchange rate of currency between India and Nepal, leakage of petroleum product during transportation, corruption and out of principle business practices has crippled the public almost every three month.