KATHMANDU, MAR 15 -
Bharat Petroleum Corporation Limited (BPCL) has offered to supply petroleum products to Nepal with the government beginning preparations to sign a new oil supply agreement with India.
A top level BPCL team met with officials of the Ministry of Commerce and Supplies (MoCS) and Nepal Oil Corporation (NOC) on Tuesday asking the government to let it supply petroleum products. According to Minister of Commerce Lekh Raj Bhatta, BPCL has been asked to present a detailed proposal within a week.
“We have asked them to send us a proposal mentioning the type and quantity of petroleum products, the mechanisms to be developed while importing products from them and the benefits Nepal can get by buying from BPCL,” said Bhatta.
He added that if BPCL’s proposal looked favourable, the government would ask the Indian government to pave the way for BPCL to supply fuel to Nepal.
This is not the first time that BPCL has shown interest in doing business with Nepal. In 2010, it had urged the Indian government to end Indian Oil Corporation’s (IOC) monopoly on exporting oil to Nepal. The oil supply agreement between Nepal and India expires on March 31. The two countries review the agreement every five years.
NOC officials said BPCL’s offer was worth considering. “Given the growth in demand for petroleum products, we need to have alternative sources to continue imports,” said Suresh Agrawal, acting managing director of NOC.
Meanwhile, Essar Oil, another Indian petroleum giant, has also shown interest in supplying fuel to Nepal. In 2009, an Essar Oil team visited Kathmandu and met with the then Commerce Minister Rajendra Mahato to explore the possibility of becoming an alternate oil exporter to Nepal. It is still too early to say whether the government will switch suppliers given its long-standing relation with IOC.
In 1974, Nepal signed a memorandum of understanding (MoU) on petroleum supply with India which defines import procedures. Nepal has been importing fuel only from IOC, but experts have long been urging the government to enlist an alternate supplier to bring competition in the supply system.
The High-Level Petroleum Sector Reform Taskforce has also made a similar recommendation. The taskforce suggested that every possible option with regard to fuel imports should be explored, from purchasing crude from oil producing nations and refining it in Indian refineries to importing oil from China Nepal’s oil imports in the first six months of the current fiscal year were worth Rs 40 billion. Imports stood at Rs 76 billion in the whole of the last fiscal year.
Govt intensifies talks as new pact nears closing
As the new petroleum supply agreement between the Nepal Oil Corporation and Indian Oil Corporation nears closing stages, the government is holding discussions with experts so as to identify complexities in the existing pact and changes required in the new accord.
Prime Minister Baburam Bhattarai has asked the committee formed to review the existing NOC-IOC agreement to hold extensive discussions to ensure that the new deal is in favour of national interest, as NOC and IOC are still in variance over some issues, according to the Ministry of Commerce and Supplies (MoCS).
The NOC and IOC review the agreement every five years and the existing one is expiring on March 31. The agreement review committee was formed last year under the recommendation of the High-Level Petroleum Sector Reform Task Force.
Nuta Raj Pokhrel, under secretary at the ministry, said IOC has shown flexibility in some of the issues raised by Nepal. IOC has said it is ready to negotiate on marketing margin issue, according to Pokhrel.
IOC, while agreeing to put an end to the Price Adjustment Factor (PAF) in the new agreement, had proposed to raise the marketing margin to 5 percent from the existing 2.5 percent charged to Nepal under PAF. PAF includes refinery charge and transportation charge, among other technical losses. “Now, IOC has shown flexibility to negotiate marketing margin,” said Pokhrel.
While proposing raising the marketing margin to 5 percent, IOC has agreed to a rebate of IRs 350 to Nepal.
IOC has also agreed to receive payments fortnightly from the existing four instalment payments a month, according to the ministry. Pokhrel said this would reduce hassles in arranging payment funds every week for NOC.
IOC has also said that it is flexible on the modality for the construction of Amlekhgunj-Raxaul Cross-Border Oil Pipeline. “It was also positive to provide technical assistance and training, among others, for the oil pipeline construction,” Pokhrel said.
Source: Kantipur
Bharat Petroleum Corporation Limited (BPCL) has offered to supply petroleum products to Nepal with the government beginning preparations to sign a new oil supply agreement with India.
A top level BPCL team met with officials of the Ministry of Commerce and Supplies (MoCS) and Nepal Oil Corporation (NOC) on Tuesday asking the government to let it supply petroleum products. According to Minister of Commerce Lekh Raj Bhatta, BPCL has been asked to present a detailed proposal within a week.
“We have asked them to send us a proposal mentioning the type and quantity of petroleum products, the mechanisms to be developed while importing products from them and the benefits Nepal can get by buying from BPCL,” said Bhatta.
He added that if BPCL’s proposal looked favourable, the government would ask the Indian government to pave the way for BPCL to supply fuel to Nepal.
This is not the first time that BPCL has shown interest in doing business with Nepal. In 2010, it had urged the Indian government to end Indian Oil Corporation’s (IOC) monopoly on exporting oil to Nepal. The oil supply agreement between Nepal and India expires on March 31. The two countries review the agreement every five years.
NOC officials said BPCL’s offer was worth considering. “Given the growth in demand for petroleum products, we need to have alternative sources to continue imports,” said Suresh Agrawal, acting managing director of NOC.
Meanwhile, Essar Oil, another Indian petroleum giant, has also shown interest in supplying fuel to Nepal. In 2009, an Essar Oil team visited Kathmandu and met with the then Commerce Minister Rajendra Mahato to explore the possibility of becoming an alternate oil exporter to Nepal. It is still too early to say whether the government will switch suppliers given its long-standing relation with IOC.
In 1974, Nepal signed a memorandum of understanding (MoU) on petroleum supply with India which defines import procedures. Nepal has been importing fuel only from IOC, but experts have long been urging the government to enlist an alternate supplier to bring competition in the supply system.
The High-Level Petroleum Sector Reform Taskforce has also made a similar recommendation. The taskforce suggested that every possible option with regard to fuel imports should be explored, from purchasing crude from oil producing nations and refining it in Indian refineries to importing oil from China Nepal’s oil imports in the first six months of the current fiscal year were worth Rs 40 billion. Imports stood at Rs 76 billion in the whole of the last fiscal year.
Govt intensifies talks as new pact nears closing
As the new petroleum supply agreement between the Nepal Oil Corporation and Indian Oil Corporation nears closing stages, the government is holding discussions with experts so as to identify complexities in the existing pact and changes required in the new accord.
Prime Minister Baburam Bhattarai has asked the committee formed to review the existing NOC-IOC agreement to hold extensive discussions to ensure that the new deal is in favour of national interest, as NOC and IOC are still in variance over some issues, according to the Ministry of Commerce and Supplies (MoCS).
The NOC and IOC review the agreement every five years and the existing one is expiring on March 31. The agreement review committee was formed last year under the recommendation of the High-Level Petroleum Sector Reform Task Force.
Nuta Raj Pokhrel, under secretary at the ministry, said IOC has shown flexibility in some of the issues raised by Nepal. IOC has said it is ready to negotiate on marketing margin issue, according to Pokhrel.
IOC, while agreeing to put an end to the Price Adjustment Factor (PAF) in the new agreement, had proposed to raise the marketing margin to 5 percent from the existing 2.5 percent charged to Nepal under PAF. PAF includes refinery charge and transportation charge, among other technical losses. “Now, IOC has shown flexibility to negotiate marketing margin,” said Pokhrel.
While proposing raising the marketing margin to 5 percent, IOC has agreed to a rebate of IRs 350 to Nepal.
IOC has also agreed to receive payments fortnightly from the existing four instalment payments a month, according to the ministry. Pokhrel said this would reduce hassles in arranging payment funds every week for NOC.
IOC has also said that it is flexible on the modality for the construction of Amlekhgunj-Raxaul Cross-Border Oil Pipeline. “It was also positive to provide technical assistance and training, among others, for the oil pipeline construction,” Pokhrel said.
Source: Kantipur
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