KATHMANDU, OCTOBER 18Â – Despite the adoption of the auto pricing mechanism, Nepal Oil Corporation (NOC) seems reluctant to adjust fuel prices in line with international market prices.
As per the auto pricing mechanism adopted on September 29, the state oil monopoly was supposed to review the prices twice in the last three weeks in line with the massive drop in the international market prices.
On Thursday, NOC received a new price list from its sole supplier Indian Oil Corporation (IOC). As per the new prices, NOC has forecast a profit of Rs 476.9 million for October. It would enjoy a profit of Rs 14.75 on a litre of petrol, Rs 5.89 on a litre of diesel and Rs 16.19 per litre on kerosene. On aviation fuel sold to domestic and international carriers, the profits would be Rs 41.58 and Rs 48.80 per litre, respectively.
However, NOC faces a loss of Rs 511.28 per cylinder on liquefied petroleum gas.
Mukunda Ghimire, spokesperson for NOC, said the oil monopoly has benefitted from the fall in the prices of petroleum products in the international market. Brent crude oil price dropped to $84.47 per barrel on Friday, according to a Reuters report.
IOC reviews export prices of petrol and diesel every fortnight, while the prices of kerosene, aviation fuel and LPG are revised monthly. It is the second time in the last two weeks NOC has posted profits.
However, it has failed to revise the domestic prices. Two weeks ago, when IOC sent the new price list, NOC did not lower the domestic prices citing long official holidays during the Dashain festival. And this time too, it is delaying the price revision.
Ghimire said NOC was scheduled to reduce the prices on Friday, but could not do so as most of the board members were absent. â€œSome of the board members are out of the valley, so we are expecting to hold a board meeting on Sunday to revise the prices,â€ he said.
The oil monopoly had last earned a monthly profit of Rs 131 million in July 2012. It had reported an annual profit of Rs 3.31 billion in 2008-09.
After facing continuous losses for the last two years, NOC adopted the auto pricing system as per the recommendation of high-level committees and the parliamentary committee.
NOCâ€™s loans taken from the government and banks and financial institutions currently stand at Rs 36.66 billion. Its losses amounted to Rs 2.05 billion as of last fiscal year.