Nepal Oil Corporation (NOC) has sought a one billion rupee loan from the government to partially clear its dues to its supplier - the Indian Oil Corporation (IOC).
As the IOC started lowering oil supplies to Nepal, NOC on Sunday requested the Supplies Ministry and the Finance Ministry to arrange the fund as soon as possible to avert a possible oil crisis.
In a letter to the Supplies Ministry and the Finance Ministry, NOC has said, “Given the shortfall in payment, the supplier, which has stopped issuing oil in credit, has reduced the supplies sharply. If normal supply is not resumed, it will spark a fresh round of oil shortages in the country.”
It has cited that the corporation, owing to huge losses, failed to make the committed payment to the IOC - for the month of August.
According to a report, the IOC lowered its supplies to about 1,200 KL a day from Friday. The supply is far less than the normal daily requirement of about 2,000 KL.
After the IOC’s decision, NOC has also restricted oil supplies in the market, citing it a move to manage stock. NOC on Monday issued only 84,000 liters of petrol in the Kathmandu Valley.
Earlier in June, the government had arranged Rs. 1.70 billion to ease the severe fuel crisis that hit the market for few months.
Reports said that the NOC spent about Rs 1 billion of the arranged fund to replenish the stock, raising the inventory to 40,000 KL from 20,000 KL, and expended the remaining Rs 700 million to clearing past dues and paying weekly tranches to its suppliers.
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