IOC demands Rs 1 billion for normal supply of petro products

Indian Oil Corporation, the supplier of petroleum products to Nepal, has made a fresh proposal to resume normal supply to if Nepal Oil Corporation pays Rs 1 billion to it.

According to the Kathmandu Post, such a statement from the Indian supplier came after NOC, despite IOC's curtail in supply and panic in the market, continued to express helplessness in generating funds to make due payment of the past bills.

Moreover, subsequent to the IOC's statement, Finance Ministry has agreed to provide Rs 500 million to NOC as loan in order to enable the ragged state-owned monopolist deal with the current supply problem.

A meeting of senior officials and ministers held at the Finance Ministry Thursday agreed to finance half the sum demanded by the IOC from the corporation.

“But NOC, citing its inability to raise funds, has pleaded for the release of Rs 1 billion,” said a source, adding that the final decision to it would come through a cabinet decision.

The latest positive indication of the government to extend financial support to the corporation is certainly a good news, a senior NOC official said.

He, however, elaborated that the supply situation of fuel could deteriorate further in the next few days, as the India is sealing the border at Raxaul from 2 pm Friday because of elections in Bihar, and NOC can resume import only from Monday. “With mere two days of stock at hand, the stop in supply through the largest import point could have a damaging impact,” stated the official, requesting anonymity.

IOC has reduced supply to Nepal by 40 percent from last three weeks, after NOC failed to release installments to clear past dues, which stand at Rs 6 billion.

On Thursday also, NOC received reduced supply of petroleum products from IOC. “Today's import totaled to mere 1,304 kiloliters, which is far less than the country's normal fuel requirement,” said the source.

According to the source, IOC supplied 350 kiloliters of petrol, 445 kiloliters of diesel and 351 kiloliters of kerosene on Thursday.