Kathmandu, October 18, 2016:Â The state-owned supplier of petroleum products, Nepal Oil Corporation (NOC) will spend Rs five billion on infrastructure development â€” setting up one petroleum reserve tank in each seven provinces â€” this fiscal year.
Prioritising construction of oil depots to boost reserves under its work plan for the Fiscal Year (FY) 2016-17, NOC has aimed to complete the land procurement process within this fiscal to set up petroleum reserve tanks in the seven provinces. For this, NOC has already started the process of procuring required lands after the NOC board approved its â€˜Rs five billion work planâ€™.
â€œThe board has already passed our proposal to invest Rs five billion to develop infrastructure to increase countryâ€™s oil reserve capacity and upgrade existing oil storage tanks this fiscal year,â€ Gopal Khadka, managing director of NOC toldÂ The Himalayan Times, adding that this investment will be made out of NOCâ€™s profit which currently stands at around Rs 180 million per month.
Khadka vowed that NOC will at least complete the land procurement process for additional storage tanks in different provinces this FY with the approved budget.
NOC plans to set up new petroleum storage tanks in Jhapa (province 1), Janakpur (province 2), Kathmandu (province 3), Pokhara (province 4), Rupandehi (province 5), Surkhet (province 6) and Dhangadi (province 7).
Under its plan, NOC will develop reserve tanks of 55,000 kilolitres in province 1; 36,000 kilolitres in province 2; 137,000 kilolitres in province 3; 40,000 kilolitres in province 4 and 65,000 kilolitres in province 5. Likewise, petroleum storage tanks of 30,000 kilolitres will be installed in province 6 and with 25,000-kilolitre capacity in province 7. In total, NOC aims to increase its oil storage capacity to 388,000 kilolitres.
The oil storage capacity of the NOC currently stands at 71,000 kilolitres, which is said to be sufficient to meet the domestic demand for only two weeks. This low storage capacity of petroleum products is cited as the major reason for acute shortage of fuel in the market even in case of slight disruption in supply from Indian Oil Corporation.
However, if NOC succeeds in installing the tanks with total 388,000 kilolitres of storage capacity, experts say it will help meet the demand for 90 days.
Khadka said that NOC will also complete works regarding conversion of 750-kilolitre kerosene tank in Thankot depot to petrol tank by the end of this fiscal year. Similarly, NOC also plans to shift its Bhalwari depot of Rupandehi, which lies in city area, to a new location where population density is low.