‘Despite strengthening in financial position, the corporation reluctant to reduce fuel prices’

Nepal Oil Corporation (NOC) has started earning operating profits after the government entity cleared all its outstanding dues.

According to the NOC, the corporation has paid back all its loans to the government and Indian Oil Corporation (IOC), the sole supplier of petroleum products to Nepal. Manoj Kumar Thakur, spokesperson for the NOC, said the corporation paid off the final installment worth Rs 700 million to the Public Debt Management Office under the Ministry of Finance on Tuesday.

Last December, the state-oil monopoly took loans of Rs 7 billion from the government citing an increasing financial burden due to soaring international prices of petroleum products. Although the amount was supposed to be paid in 10 installments, the NOC has cleared the dues just in half of the committed period.

Thakur said the NOC also cleared long-term dues to the IOC. “The amount to the Indian supplier has also been settled now.”

The NOC has shown a good comeback in the past 20 months. In March 2022, the corporation was reeling under a loss of Rs 50 billion including Rs 15 billion dues to various government entities.

The NOC was reported to have faced heavy financial burden after it was unable to implement the auto pricing system due to political reasons. As a result, the corporation sustained heavy financial losses amid high rise in prices of oil in the international market.

According to the NOC, it is now having profits of Rs 3 per liter in petrol and Rs 2 per liter in diesel and kerosene each. The corporation sustains a loss of Rs 280 per cylinder in cooking gas.

An official of the NOC said the corporation is likely to reduce the prices of most of the petroleum fuels very soon. “However, the price of cooking gas could increase as the corporation is looking forward to implementing an auto pricing system in the product.”