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Parliamentary Panel suggests government to bring Petroleum Act | Nepali Economy
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Parliamentary Panel suggests government to bring Petroleum Act

A parliamentary committee formed to recommend reforms in fuel business suggested the government to pass Petroleum Act that could help manage Nepal Oil Corporation and fuel business in the country.

The Rs 107-billion worth petroleum sector could not be governed by the law of 1983, the committee suggested, adding that the Act will also help manage price volatility.

The government should bring Petroleum Act within three months, it suggested.

“The petroleum sector needs to be governed by an Act according to the changed times,” the report said recommending to implement an auto price mechanism under the new Act.

Likewise, the committee – that is the 12th one formed to revamp fuel business – has asked the government to prioritise the state oil monopoly as fuel is a political commodity.

However, the panel has suggested government to waive value added tax (VAT) on liquefied petroleum gas (LPG) – popularly known as cooking gas –for domestic users.

According to the report, since cooking gas has become a basic commodity for households, the government  should also waive VAT as other SAARC countries do. The government collects Rs 245 as VAT per cylinder of cooking gas.

The report also recommended immediate implementation of two-colour – blue (14.2 kg) for commercial use and red (19 kg) for domestic use with limited subsidy. The government should charge market price for the blue cylinders that have been recommended for the commercial use, it added.

Despite the government and NOC’s repeated attempt, the scheme launched on June 15, 2013 could not come into implementation.

Meanwhile, the NOC projected its losses to reach Rs 839.6 million monthly on cooking gas alone according to the new tariff sent by Indian Oil Corporation (IOC) – on June 1 – the sole supplier.