KATHMANDU, MAR 25 - 2012
It is likely that Nepal will continue with Indian Oil Corporation (IOC) as its supplier of petroleum products for the next five years even though the government has directed concerned authorities to explore options for other potential suppliers.
With seven days left for the agreement to expire between Nepal Oil Corporation (NOC) and IOC, both parties have speeded up work to finalise the new agreement.
State-owned NOC and IOC are drafting the agreement paper to renew their five-year petro supply agreement for the import of petroleum products to Nepal from India, said an official at NOC.
“Nepal will most likely keep open the option of importing fuel from third countries in the agreement but it will not look for an alternative to IOC as of now,” the official claimed.
A team from IOC is currently visiting Nepal to sort out all issues which have remained unresolved and to finalise the draft of the agreement.
“Representatives of both NOC and IOC are trying to solve all contentious issues,” the NOC official said. “Unsolved issues are still being discussed at the top level which are expected to be solved by tomorrow.”
The five-year contract agreement between NOC and IOC is a government-to-government supply arrangement under which India, through IOC, is meeting all of Nepal’s petroleum demands via NOC. The existing agreement will expire on March 31.
Both NOC and IOC have made some progress to sign the new agreement, the NOC official revealed.
IOC has already agreed to drop costs associated to refineries and duties, which is known as the Price Adjustment Factor (PAF) under its current price formula.
But, the withdrawal of PAF from the pricing structure has not satisfied the Nepali side. IOC has proposed to raise the other components of the price formula –– the marketing margin –– to 5 per cent from the existing 2.5 per cent levied on the outright prices of the finished products
“NOC will try its best to keep the marketing margin unchanged at 2.5 per cent or to introduce a flat commission system,” the official informed.
Similarly, Nepal has also proposed to reduce transportation price and port-facilitator cost on Liquefied Petroleum Gas, according to the official.
Petroleum business is considered a very sensitive issue since the country does not have any refinery and meets all its petroleum demands through imports from IOC at present.
Source: THT
It is likely that Nepal will continue with Indian Oil Corporation (IOC) as its supplier of petroleum products for the next five years even though the government has directed concerned authorities to explore options for other potential suppliers.
With seven days left for the agreement to expire between Nepal Oil Corporation (NOC) and IOC, both parties have speeded up work to finalise the new agreement.
State-owned NOC and IOC are drafting the agreement paper to renew their five-year petro supply agreement for the import of petroleum products to Nepal from India, said an official at NOC.
“Nepal will most likely keep open the option of importing fuel from third countries in the agreement but it will not look for an alternative to IOC as of now,” the official claimed.
A team from IOC is currently visiting Nepal to sort out all issues which have remained unresolved and to finalise the draft of the agreement.
“Representatives of both NOC and IOC are trying to solve all contentious issues,” the NOC official said. “Unsolved issues are still being discussed at the top level which are expected to be solved by tomorrow.”
The five-year contract agreement between NOC and IOC is a government-to-government supply arrangement under which India, through IOC, is meeting all of Nepal’s petroleum demands via NOC. The existing agreement will expire on March 31.
Both NOC and IOC have made some progress to sign the new agreement, the NOC official revealed.
IOC has already agreed to drop costs associated to refineries and duties, which is known as the Price Adjustment Factor (PAF) under its current price formula.
But, the withdrawal of PAF from the pricing structure has not satisfied the Nepali side. IOC has proposed to raise the other components of the price formula –– the marketing margin –– to 5 per cent from the existing 2.5 per cent levied on the outright prices of the finished products
“NOC will try its best to keep the marketing margin unchanged at 2.5 per cent or to introduce a flat commission system,” the official informed.
Similarly, Nepal has also proposed to reduce transportation price and port-facilitator cost on Liquefied Petroleum Gas, according to the official.
Petroleum business is considered a very sensitive issue since the country does not have any refinery and meets all its petroleum demands through imports from IOC at present.
Source: THT
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