Nepal Oil Corporation (NOC) has announced a dramatic turnaround posting a profit of Rs18 billion for this fiscal year after five straight years of losses. However, the company still owes Rs21.88 billion to various creditors.
A sharp drop in sales losses of liquefied petroleum gas (LPG) has helped NOC to earn a profit. After the corporation adopted an automated pricing system in the petroleum business, except LPG, its ballooning losses began to drop.
The last time NOC made a profit was in 2008-09. In August 2010, the company’s decision to distribute Rs198.8 million in bonuses to its employees from its profit of Rs3.31 billion for the fiscal year 2008-09 was struck down by the Commission for the Investigation of Abuse of Authority (CIAA) citing the Bonus Act which does not allow the distribution of bonuses by institutions that have huge debts and are facing a massive cumulative loss.
NOC Managing Director Gopal Bahadur Khadka said the government-owned undertaking was able to post the gain mainly due to a fall in liabilities in LPG. “The loss on a cylinder of LPG has fallen to only Rs17.28 which used to be more than Rs1,000 in the past.”
Since Sept 29, 2014, NOC has been implementing the auto pricing system on petrol, diesel and aviation fuel. However, it still subsidises LPG to the tune of Rs17.28 per cylinder. Currently, a cylinder of LPG costs Rs1,470 retail.
The latest profits have allowed NOC to repay loans and interest amounting to Rs14.98 billion mainly to the Citizen Investment Trust and Employee Provident Fund. According to NOC, it paid the two institutions Rs6.38 billion and Rs8.60 billion respectively. The interest payments totalled Rs2.88 billion.
The corporation is still saddled with loans amounting to Rs21.88 billion, including debts totalling Rs12.64 billion to the government. According to Khadka, they have asked the government to turn the debts into fixed capital.
NOC said its projected profit presently is Rs1.22 billion per month. Based on the current profit scenario, the oil monopoly is likely to clear its entire loans in the next eight to nine months.
NOC to expand oil depots
KATHMANDU: Nepal Oil Cor-poration (NOC) said it plans to increase the storage capacity of its depots located across the country in the fiscal year 2015-16. Under this scheme, the enterprise has targeted boosting stocks of almost all types of petroleum products. NOC Managing Director Gopal Bahadur Khadka said they had planned to upgrade the existing infrastructure and install new infrastructure to increase the storage capacity. “We are making the move in order to maintain regular supplies of petroleum even during catastrophes.” Regarding LPG, the company will build storage plants with a capacity of 35,000 kilolitres each in Janakpur, Dhading, Mechi-Koshi, Western Region and Mid-Western or Far Western regions.It will be boost the capacity of its aviation fuel depot in Kath-mandu by 4,000kl. It also plans to upgrade the storage capacity of its Pokhara depot by 150kl. It plans to construct new storage pla-nts at Bhadrapur Airport in Jhapa, Simara Airport in Bara and Gautam Buddha Airport in Rupandehi. It will begin work to install storage plants in Janakpur, Solukhumbu and Dang. NOC also aims to increase the storage capacity of its petrol and diesel depots at Thankot in Kathmandu, Charali in Jhapa, Dhanga-dhi in Kanchanpur and Bhairahawa in Rupandehi. The company has been operating two gasoline stations in Manthali, Ramechhap from the last two years. (PR)
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