We Won’t Raise Fuel Supply: Indian Oil Corp. to Nepal Oil Corp.

Mar 3, 2016- In what indicates that fuel imports from India will not increase to pre-blockade levels any time soon, Indian Oil Corporation (IOC) has informed Nepal Oil Corporation (NOC) it will not boost petroleum supply to Nepal. 

Even after the lifting of the Indian blockade in the first week of February, IOC has been supplying just 70 percent of the requirement.

According to NOC Managing Director Gopal Bahadur Khadka who recently visited India to hold talks with IOC officials, the latter told him that Nepal would have to rely on the current volume of supply, citing “technical problems”.

“They (the IOC officials) just said they would increase the supply gradually,” he said.

Khadka, who held talks with IOC’s Marketing Director BS Canth, however, failed to meet the IOC chief.

During the four-and-half-month-long trade embargo, Nepal received just 30 percent of the fuel demand. After India lifted the embargo, the supply has increased to 73 percent of the demand, according to NOC.

With IOC remaining non-committal on boosting the supply, NOC has again turned to China.

Immediately after the Indian blockade, the government had appr-oached the northern neighbour to manage the crippling fuel crisis. Breaking IOC’s decades-long monopoly, NOC had signed a framework agreement with PetroChina on fuel imports. However, the whole process went on the backburner.

Now, Khadka says there is need a for looking for an alternative source for fuel imports. “We have to look for alternative sources to fulfil the remaining 30 percent of the demand,” he said.

As the supply remains below the demand, long queues of motorists are seen at refuelling stations. Average daily fuel import from India during the period between February 8 and March 1 stood at 1,243kl.  However, the daily demand for petrol and diesel stands at 1,700kl.

Nepal imported 21,430kl of diesel, 8,396kl of petrol, 4,962kl of aviation fuel, and 304kl of kerosene in the 24-day period, according to NOC.

NOC has claimed it has been increasing petroleum supply in the domestic market, the Kathmandu valley in particular. In the Valley, the supply has been increased to 450kl daily from 350kl earlier while the diesel supply has reached 500kl from 450kl daily, according to NOC.

Khadka claimed they increased the supply almost 1.5 times of the daily demand. NOC’s Thankot Depot on Wednesday dispatched 561kl of petrol and 474kl of diesel to Kathmandu. Despite NOC’s claim, petroleum distribution is far from normal.

Asking the general people not to hoard fuel, Khadka said they were trying their best to regularise fuel distribution. “We are planning to distribute fuel from early in the morning everyday starting from Saturday,” he said.

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