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A Different View To Price Change

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Dashain being the reason of great grin smiles in the faces of people, the NEWS of price rates of petroleum products being decreased has added up joy to the faces. Exactly opposite is the reaction when these price rates are increased. On increasing, they end up cursing the government and showing jealousy to the petrol pump owners, about how they get the chance to sell the petroleum, bought for lower prices, in higher prices. But on going into its detail, one may come to know that the jealousy is wrong, for petrol pumps also usually don’t make profits out of price hike.

The Nepal Oil Corporation, which is the monopoly body to determine price rates for petroleum dealers, is the one to be cursed or praised for any actions related to prices. So, it is the one, for which the public needs to be jealous of for earning out of price changes, though practically it is always at loss. The Nepal Oil Corporation clears all the oil from its depot before decreasing prices, by supplying as much as possible to the petrol pumps. Because of this, the corporation will have no oil to bear loss for, by decreasing price, and the ultimate loss is bore by the retail pumps, with lots of stock in their tanks.

Exactly opposite is the process for price hike. The Corporation stops supply of oil to the retailers, if it is intended to increase the price. It fills its depot with as much of oil possible, so that on increasing the price after few days, it will be able to sell at higher prices. And the retailers, thus, won’t be able to enjoy much profits out of price hike, for their pumps becomes dry because of few days of no supply of oil by the corporation. In turn, the retailers end up being a character of jealousy for the public, because the public doesn’t recognize the real process behind the hike. This is what the history also shows: there is usually a shortage of petroleum in the market before its price gets increased, as per the pattern of past days.

But still, there will obviously be differentiation in the way people look at this action of the Nepal Oil Corporation. For some, this is good, for they believe it gives at least a little compensation for the ongoing loss of the corporation. Whereas for some, especially for the petrol pump owners, this is an evil act out of monopoly power. Whatever be the perception, but the undoubted truth is: people’s jealousy towards petrol pumps is worthless.

The Nepal Oil Corporation, with a loss of 9.52 billion in the last year, is the second highest loss maker among the public enterprises after Nepal Electricity Authority. There is also an ongoing debate on whether the government should continue giving funds to the corporation out of the budget or not. With this situation existing since long, even a small incident related to the Nepal Oil Corporation is obvious to come as a headline in the front page. This has at times come as corruption, sometimes as fire in the tanks and majorly as price change. For majority Nepalese having been a creature adapted to skip headlines of politics and daily crimes, price change in petroleum comes as a wonderful opportunity to attract readers.

A different view to price change

Dashain being the reason of great grin smiles in the faces of people, the NEWS of price rates of petroleum products being decreased has added up joy to the faces. Exactly opposite is the reaction when these price rates are increased. On increasing, they end up cursing the government and showing jealousy to the petrol pump owners, about how they get the chance to sell the petroleum, bought for lower prices, in higher prices. But on going into its detail, one may come to know that the jealousy is wrong, for petrol pumps also usually don’t make profits out of price hike.

The Nepal Oil Corporation, which is the monopoly body to determine price rates for petroleum dealers, is the one to be cursed or praised for any actions related to prices. So, it is the one, for which the public needs to be jealous of for earning out of price changes, though practically it is always at loss. The Nepal Oil Corporation clears all the oil from its depot before decreasing prices, by supplying as much as possible to the petrol pumps. Because of this, the corporation will have no oil to bear loss for, by decreasing price, and the ultimate loss is bore by the retail pumps, with lots of stock in their tanks.

Exactly opposite is the process for price hike. The Corporation stops supply of oil to the retailers, if it is intended to increase the price. It fills its depot with as much of oil possible, so that on increasing the price after few days, it will be able to sell at higher prices. And the retailers, thus, won’t be able to enjoy much profits out of price hike, for their pumps becomes dry because of few days of no supply of oil by the corporation. In turn, the retailers end up being a character of jealousy for the public, because the public doesn’t recognize the real process behind the hike. This is what the history also shows: there is usually a shortage of petroleum in the market before its price gets increased, as per the pattern of past days.

But still, there will obviously be differentiation in the way people look at this action of the Nepal Oil Corporation. For some, this is good, for they believe it gives at least a little compensation for the ongoing loss of the corporation. Whereas for some, especially for the petrol pump owners, this is an evil act out of monopoly power. Whatever be the perception, but the undoubted truth is: people’s jealousy towards petrol pumps is worthless.

The Nepal Oil Corporation, with a loss of 9.52 billion in the last year, is the second highest loss maker among the public enterprises after Nepal Electricity Authority. There is also an ongoing debate on whether the government should continue giving funds to the corporation out of the budget or not. With this situation existing since long, even a small incident related to the Nepal Oil Corporation is obvious to come as a headline in the front page. This has at times come as corruption, sometimes as fire in the tanks and majorly as price change. For majority Nepalese having been a creature adapted to skip headlines of politics and daily crimes, price change in petroleum comes as a wonderful opportunity to attract readers.

Author: Prabin Basyal

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