Rising prices of petroleum products in the international market have had a negative impact on the economic health of the Nepal Oil Corporation (NOC).
Due to the unexpected rise of fuel price in the international market over the months, the NOC – the state-owned petroleum supplier – is now in financial crisis to supply petroleum products in the market, said an NOC official.
High fuel prices not only affect the financial health of the Corporation, but also hit consumers as well. It will have a snowball effect on the national economy.
The monthly loss of the Corporation has reached over Rs. 6 billion from the sale of petroleum products, said Binitmani Upadhyay, spokesperson for the NOC.
The Corporation has not yet incurred so high a monthly loss, he said.
“We have to bear the impact of the increase in fuel prices due to the Russia-Ukraine war,” he said.
The price of crude oil in the international market has increased USD 103 per barrel at present while it was around USD 90-93 per barrel a week ago.
As per the new price structure received from the Indian Oil Corporation Tuesday (March 1), the prices of gas, petrol, diesel, kerosene have gone up due to rising crude oil prices, he said.
The IOC sends price list to NOC on fortnightly basis.
Diesel price has gone up by Rs. 3.98 per litre, diesel by Rs. 3.08 per litre and kerosene by Rs.10.30 per litre.
Similarly, the price of cooking gas has gone up by Rs. 99.17 per cylinder and aviation fuel by Rs. 3.32 per litre.
“The Corporation lost Rs. 3.09 billion in 15 days alone due to the price hike. We were under pressure to hike the price again,” he said.
As per the new price structure, the loss on sale of petrol has increased to Rs. 20.52 per litre, diesel to Rs. 16.08 per litre and cooking gas to Rs. 665.34 per cylinder.
However, the NOC will make a profit of Rs. 14.69 per litre in kerosene, Rs. 14.41 per litre in aviation fuel (domestic flight) and Rs. 48.44 per litre in aviation fuel (international flights).
Currently, the NOC is selling a litre of petrol at Rs. 145, diesel and kerosene at Rs. 128 and cooking gas at Rs. 1,575 per cylinder.
Upadhyay said that the amount of IC cannot be paid from the regular sale of the corporation after the new price was received on Tuesday.
“The Corporation has to pay in two installments to the IOC in March. We cannot pay the installments without increasing the price or the government giving us money,” he said.
Even the NOC adjusted fuel prices under the auto pricing system, cumulative loss is increasing due to a significant hike of fuel price in the international market than adjusted price, he said.
The Corporation has been paying the installments to the IOC by using money of price stabilisation fund after it finished its reserve profit.
The NOC has faced a loss of Rs. 28 billion in sale of petroleum products till date of the current fiscal year.
Source : TRN,