NOC profits Rs. 30 billion in Feb

Following four years of losses, Nepal Oil Corporation (NOC), the state-owned importer of petroleum products, is operating with profit of Rs. 30 billion in this February.

NOC officials, however, argued the extent of the profit was still low to generate funds for settling outstanding dues and transferring the price benefits to the consumer level.

A report quoted Ichha Bikram Thapa, NOC spokesperson as saying, the import prices issued as of February 16, the corporation would post a profit of Rs 30 million this month.

According to import prices issued by the NOC, it is currently earning profit of Rs 3 per liter of petrol at the domestic rates, which stands at Rs 67 at present. NOC is also profiting Rs 18 per liter of aviation fuel.

The situation of profit arose after the decline in international oil prices pushed the import prices below the domestic prices set for major petroleum products. A contrary situation had resulted in billions of rupees in losses to the corporation previously.

However, the NOC is still incurring loss by Rs 263 per cylinder in cooking gas. The monthly loss accumulated out of cooking gas totals Rs 140 million, the report quoted Thapa as saying.

Nevertheless, the consumption of petrol and aviation fuel is higher than that of cooking gas, which is generating a total profit of over Rs. 30 billion to the NOC.

Owing to the disparity in import-sales prices, NOC incurred losses that crossed Rs 20 billion over the past four years. While its outstanding dues with the Indian supplier had reached as high as Rs 11 billion last year, it has to repay additional Rs 4.50 billion to domestic financial institutions at present.

With the profit and gradual payment of past dues, NOC’s due on account of petroleum imports to the Indian supplier has also gone down to Rs 6 billion.

The NOC had paid Rs 1.10 billion to the Indian Oil Corporation (IOC) in December.

“We are also making payments in parts,” the report quoted Thapa, elaborating the reason for decline in dues.

The sources say, even though the outstanding due to IOC has dropped over the past few months, the volume of due is still high.