Slump in Global Crude Price Reduces NOC Loss

KATHMANDU, APR 17 - 2013

The state-owned Nepal Oil Corporation ( NOC ) has started making profit on all petroleum products except on liquefied petroleum gas (LPG) as per the latest tariff sent by Indian Oil Corporation (IOC) on Tuesday.

With this the debt-ridden NOC monthly projected loss has dropped to Rs 67.2 million from Rs 95 million. The latest revision means NOC ’s profit on a litre of petrol, diesel and kerosene has increased to Rs 9.42, Rs 1.39 and Rs 13.78 respectively. The corporation’s profit on a litre of aviation fuel sold to domestic and international carriers stands at Rs 24.96 and Rs 29.69 respectively.

However, it has been incurring loss of Rs 504 on an LPG cylinder. NOC ’s supplier IOC reviews export price of petroleum products on 1st and 16th of every month to reflect changes in the global oil market.

Export price of petrol and diesel is reviewed fortnightly, while that of kerosene, aviation fuel and LPG is done on a monthly basis. NOC attributed the recent fall in crude oil price in the international market led to changes in the cost structures in the domestic market.

According to a Reuters report, Brent crude oil hit an eight-month low to $101 a barrel on Monday as the outlook for global crude demand growth dimmed. Brent crude oil was at $ 108.76 per barrel on April 1.

NOC currently owes Rs 28 billion to the government and banks and financial institutions.

In the first eight months of the current fiscal year, Nepal imported petroleum products worth Rs 68.07 billion, up 17.4 percent compare to the same period last year.

Source: The Kathmandu Post

NOC fails to implement PMO directive

KATHMANDU, NOV 27, 2012

The state-owned oil monopoly Nepal Oil Corporation (NOC) has found a good excuse to ignore implementation of two-colour cooking gas cylinder — red for domestic and blue for industrial purpose — as directed by Prime Minister’s Office (PMO) from tomorrow.

“The Nepal Oil Corporation cannot introduce different colour cylinder by tomorrow,” spokesperson at the Ministry of Commerce and Supplies (MoCS) Deepak Subedi, said, adding that NOC cannot bring the blue coloured cylinder on time due to standard provision of Nepal Bureau of Standards and Metrology (NBSM).

The blue colour Liquefied Petroleum Gas (LPG) cylinder — popularly known as cooking gas — cannot be produced unless the bureau will change its existing regulations, he quoted Nepal Oil Corporation acting managing director Suresh Kumar Agrawal as saying.

The process to change existing provision is a lengthy one, according to the ministry that wants the PMO to form a committee led by Industry Minister to amend the existing provision of Nepal Bureau of Standards and Metrology.

Earlier on November 20, Prime Minister’s Office had re-directed Nepal Oil Corporation strictly to implement the decision within a week or face the music.

The PMO’s deadline ends tomorrow but the corporation and traders have done nothing till date.

“Ministry of Commerce and Supplies had asked Ministry of Industry to give consent to amend the provision,” Subedi said, adding that they have asked for the consent of Ministry of Industry after Nepal Oil Corporation informed them of the legal hurdle in changing the colour of the cylinder.

The government had warned LPG traders that it would take action against them, if they failed to bring out blue and red colours cooking gas in the market within a week.

Earlier in July too, PMO had directed Nepal Oil Corporation to introduce cooking gas cylinders with separate colours for domestic and industrial purpose.

Despite frequent follow-up and direction to the ministry, NOC and traders, Ministry of Commerce and Supplies, they all have been reluctant in reforming the petroleum sector.

Cooking gas usage increases 

The number of households using cooking gas has increased by three times in the last one decade, decreasing dependency on firewood. According to a new census, 21.03 per cent of households use cooking gas, compared to 7.67 per cent in 2001.

Earlier, in 2001, families using firewood stood at 65.20 per cent, which has now decreased to 64 per cent. Families using kerosene, guitha (dry cow or buffalo dunk), gobargas (mithen gas derived from cow and buffalo dung) and electricity are one per cent, 10.4 per cent, 2.4 per cent and 0.1 per cent respectively.

Source: THT