No reduction in fuel price despite auto pricing mechanism
Nepal Oil Corporation (NOC) failed to adjust fuel prices in line with international market prices, despite the adoption of the auto pricing mechanism.
The state oil monopoly – that receives price list every first and 16the day of the Gregorian calendar – has adopted 'semi auto pricing mechanism' from September 29 but failed to review the prices twice in the last three weeks, despite a huge drop in the international market prices.
NOC today received a new price list from its sole supplier Indian Oil Corporation (IOC). According to the new price list, the corporation is going tomake a profit of Rs 476.9 million in the month of October. NOC would benefit Rs 14.75 on a litre of petrol, Rs 5.89 on a litre of diesel and Rs 16.19 per litre on kerosene. Likewise, it would make profits of Rs 41.58 and Rs 48.80 per litre, respectively, on domestic and international aviation fuel.
But the oil monopoly is still incurring a loss of Rs 511.28 in a cylinder of liquefied petroleum gas, popularly known as cooking gas.
The NOC has benefitted from the fall in international price, accepted spokesperson of the NOC Mukunda Ghimire. Brent crude oil price dropped to $84.47 per barrel, according to a Reuters. But the NOC failed to share the benefit with the consumers.
Some of the board members are out of the valley, so we are expecting to hold a board meeting on Sunday to revise the prices,” he informed, adding that the corporation has adopted the auto pricing system – as prescribed recommendation of high-level committees and the parliamentary committee – after facing continuous losses for the last two years.
However, NOC had last earned a monthly profit of Rs 131 million in July 2012. Likewise, it had also reported an annual profit of Rs 3.31 billion in the fiscal year 2008-09.
After repeated loss, the NOC’s has borrowed some Rs 36.66 billion from the government and banks and financial institutions. Its has a total of Rs 2.05 billion loss as of last fiscal year.