Dec 272011
 

The government on Tuesday decided to provide Rs 1.5 billion as loan assistance to Nepal Oil Corporation (NOC) to ease supply of petroleum products.

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Again long queues are seen at gas stations to refuel vehicles due to problem of fuel shortage in Kathmandu valley. According to the Nepal Petroleum Dealers’ National Association (NPDNA), currently private petrol pumps are receiving only 20 percent of the total demand for diesel from NOC, while petrol deliveries have been slashed by 50 percent.

Suresh Kumar Agrawal, officiating managing director of NOC, said “NOC has credit worth Rs 160 billion to Indian Oil Corporation (IOC) and because of the cash crunch, it is not in a position to ensure smooth supply.” Currently, NOC is incurring a loss of Rs 1.25 billion per month as it is selling petroleum products below the cost price.

As per the December 23 agreement between Prime Minister Baburam Bhattarai, Finance Minister Barsha Man Pun, Commerce and Supplies Minister Lekh Raj Bhatta and NOC officials, a Cabinet meeting held at Singha Durbar today morning decided to support the cash strapped state-owned NOC instead of readjusting the price of fuels for the time being.

NOC officials said that they will use the money to pay up IOC and the loan assistance would help in supplying fuel for at least three months. (Photo Credit: Kantipur)

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