“Oil prices will rise as long as the Russian-Ukrainian war rages” « Khabarhub

KATHMANDU: Nepal Oil Corporation (NOC) recently submitted a 10-point suggestion to the Prime Minister’s Office and the Ministry of Commerce and Supplies to reduce fuel consumption.

The Company’s board meeting decided to send a 10-point proposal to reduce consumption immediately, saying that fuel supply could be affected due to the ongoing shortfall.

According to the NOC, the government failed to provide the necessary resources during the crisis. In a 10-point suggestion, the company suggested the government provide electric cookers at preferential prices, impose a fuel quota system, and provide 5 liters of fuel for both bicycles and 20 liters of fuel for cars and small vehicles.

In this context, Dhiraj Basnet of Khabarhub reached out to the NOC’s co-spokesperson, Pushkar Karki, to find out the Society’s version of the 10-point suggestions and the surge in oil prices. Excerpts:

What prompted the Nepal Oil Corporation to submit 10 point suggestions to the government?

The consumption of petroleum products is increasing at the rate of 10% each year. However, in this difficult economic situation, consumption increased by 70%.

Because of this, the nation’s money has to be spent a lot on the purchase of petroleum products. Oil consumption will have to pay Rs 30 billion.

We couldn’t afford it. Therefore, we had given 10-point options to reduce the consumption of petroleum products.

NOC is intended to sell petroleum products. Doesn’t his suggestion to reduce sales seem contradictory? Does it indicate an impending crisis?

We had also submitted 10-point suggestions to the government earlier. A few months later, consumption had slightly decreased. As there is a crisis everywhere in the world, we said that it was necessary to reduce the consumption of petroleum products whatever the situation.

Russia has given oil to a country like India and China at a lower price and how can India sell it to Nepal at a higher price?

We do not buy crude oil but finished products from the Indian Oil Corporation. Its cost has now increased worldwide. Because of this, the price increased and the cost was high.

This fiscal year was Rs 52 billion, we asked Nepal Rastra Bank not to import more than Rs 12-13 billion per month. Consumption was over Rs. 30 billion.

Why did the oil that India got cheaply cost us dearly?

We have not yet received oil from Russia. We used oil imported from Gulf countries. However, the Nepalese government has also taken the initiative to import oil from Russia.

The NOC submitted a 10-point proposal for “reducing oil consumption, won’t the country stop if your proposal is implemented?” »

We do not mean that all the points of our proposal must be applied. We ask you to quickly decide on the main ones. We have focused on foreign exchange reserves by reducing the consumption of petroleum products and promoting electronic gadgets.

Schools have been closed in Sri Lanka due to a lack of oil. Is Nepal in a similar situation?

Sri Lanka had no foreign currency and could not consume petroleum products. The storage condition of Nepal is not like that. Nepal has foreign exchange reserves with a duration of more than six months.

Oil prices rose again. Is the increased price list from the Indian Oil Corporation?

The price was raised by the Nepal Oil Corporation. The purchase cost in India a year ago was 52/53 rupees per litre. But now it has doubled to 133. At present the price of petroleum products is Rs 211 and we have given it at Rs 181. There is still Rs 30 loss per litre.

People expected relief after tax deduction on petroleum products, why did NOC raise the price?

The Council of Ministers decided to adjust the price of gasoline and diesel. Therefore, the loss should be compensated by mid-July. Looking at the global market, prices have been rising steadily over a period of about 20 months. Russian oil will not enter the world market until the end of the war between Russia and Ukraine. The war is likely to drive the price up even further.

Does the NOC have a substantial plan to deal with the situation provided the price of petroleum products continues to rise?

30 billion remains to be paid to Indian Oil Corporation. Until then, it is reducing the supply of oil curtains. This increases the demand in the market. Therefore, to stop this, we have asked the government of Nepal to reduce the consumption of raw materials.

Many people say that the NOC awarded staff bonuses despite heavy losses every day. Doesn’t this matter attract attention at the NOC meeting?

No bonus has been awarded to an employee since 2001. We have also cut many facilities. We calculated profit and loss every 15 days. Many organizations have researched and have all the data.

What happens if the government does not implement the 10 point suggestions?

Even before that, we had given various suggestions. The rule of giving two days off per week was also enforced. On this basis, gasoline consumption was reduced by 13% and diesel by 5% in June. Therefore, we aim to reduce consumption in every possible way.

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