Fuel crunch likely in festive season

KATHMANDU, Sept 26 - With the government-endorsed 3-billion-rupee bailout plan for Nepal Oil Corporation (NOC) crawling through the bureaucracy, motorists may be running on empty fuel tanks during the upcoming festival season.The government has managed to get the Citizens' Investment Trust (CIT) to pledge only Rs. 600 million in loans ...

Even then NOC won't have enough cash to import fuel in sufficient quantities to restore normal supplies.

The corporation's purchases of petroleum products with the loans it has acquired so far amount to 48,300 kiloliters (KL) as of Sept. 23. This is just about 60 percent of the monthly requirement, whereas NOC has estimated that it would need to import 76,750 KL for September in order to ensure normal supply during the festivals.

"At the current rate of import, we don't think we will be able to match supply with demand," said a senior NOC official.

The corporation is optimistic about procuring adequate stocks with the Rs. 2.4 billion credit that the Indian government extended to Nepal during Prime Minister Pushpa Kamal Dahal's visit to New Delhi last week. However, sources said that Indian Oil Corporation (IOC) still has not received any formal communication from the Indian government.

"Until IOC receives such a notification, it claims that oil supplies will be made only on a cash basis," said the official.

NOC has paid Rs. 3 billion to the Indian supplier as of Sept. 23. It is planning to make another payment of Rs. 733.28 million on Sept.

Corporation officials warned that the government would need to find money for NOC as soon as possible if the supply situation is to improve in the next two weeks.

"The upcoming holidays will mess up our work plan. So the government must release the funds soon," said the official.

NOC has also asked the government to arrange a fast lane for tankers at Birgunj customs. It said the entry point had become overcrowded as shipments destined for the east have been diverted through India after the East-West Highway was damaged by the Koshi floods.