By Karuna Thapa
Kathmandu, March 8
The Nepal Oil Corporation (NOC) has indicated that it is facing financial difficulties as a result of the steady rise in the worldwide market price of petroleum products over the previous year.
The fund has reached the point of emptiness, according to the company, after paying Rs 14.30 billion to the Indian Oil Corporation on Monday for the first installment of March.
Because of the surge in gasoline costs, Nagendra Sah, the corporation’s deputy executive director, and finance head said Rs 8.55 billion was spent on the price stabilization fund in the previous six months. He said that the corporation’s price stabilization fund, which has been unable to cover the purchase price of gasoline from daily sales, had run out of money.
The added financial strain has grown, according to Sah, when the Indian Oil Corporation utilized an additional Rs 4.25 billion from the stability fund to pay the first of two installments in March. ”The sum collected has achieved depletion as the firm has been profitable continuously since 2071 BS. Following that, the government should provide the firm with more funds for oil purchases ”Sah said.
He stated that just Rs. 4.45 billion remains in the 13 billion funds. On Sunday, the fund’s Board of Directors agreed that a sum of Rs 14.30 billion would be insufficient to pay Indian Oil Corporation (IOC) for the first installment of this month.
Fuel is being traded at a loss
According to the Nepal Oil Corporation, the company must pay the Indian Oil Corporation an average of Rs 26.50 billion each month for petroleum purchases. However, according to Sah, the financial department’s chief, the amount collected from the corporation’s monthly sales is just Rs 24 billion.
He said that the price stability fund has been in operation since the start of the current fiscal year since the price could not be raised every month to offset the growing deficit. According to the company, Rs 2.5 billion from the money had been spent by December, and Rs 6.5 billion had been taken twice more and handed to IOC. ”Rs 8.55 billion of the fund’s Rs 13 billion has been spent. If the deficit stays unchanged, the fund’s remaining balance will be depleted in no time ”Sah said.
In 2071 BS, a fund like this was established to relieve consumer strain caused by high gasoline costs. The Joint Secretaries of the Ministry of Commerce, Ministry of Finance, and Prime Minister’s Office make up the fund, which is led by the Commerce Secretary and Chairman of the Corporation’s Board of Directors.
One percent of retail sales of petroleum goods and gas goes towards the fund. In addition,
money from the fund’s operations was put in this account.
