Team named to sign oil trade deal with ChinaThe government on Thursday named a seven-member team to sign the first commercial oil deal with Petro-China in Beijing this week. The delegation will “probably” leave for Beijing on Friday.
The government on Thursday named a seven-member team to sign the first commercial oil deal with Petro-China in Beijing this week. The delegation will “probably” leave for Beijing on Friday.
According to the Ministry of Commerce and Supply, the team is led by Joint Secretary Shambhu Ghimire and comprises representatives from the Law, Finance, Foreign ministries, Nepal Bureau of Standards and Metrology and Nepal Oil Corporation (NOC).
Commerce Minister Ganesh Man Pun said that the team would leave for China as soon as the prices and taxes modality was finalized.
The government has been making efforts through Nepali Ambassador to China Mahesh Maskey to have Chinese local taxes waived before signing the comprehensive oil trade deal.
“If the local taxes on petroleum products are waived, the cost to Nepali consumers will be similar to what they are now paying for Indian fuel,” Pun said. He did not divulge the prices of the fuel that Nepal would be importing from the northern neighbour after signing the commercial agreement.
Pun said that China had informally agreed to waive the taxes. The government plans to import at least one-third of Nepal’s petroleum requirement from China.
Following the unofficial trade embargo imposed by India, the domestic market has been facing an acute shortage of fuel. The ministry said the demand had increased many times while the supply amounts to 15-20 percent of the requirement. On October 28, state-owned oil monopoly NOC had signed a framework agreement with PetroChina, which is owned by the Chinese government, to make commercial imports of fuel from China.
Another agreement was signed to provide 1.3 million litres of petrol as grant to Nepal, shipments of which were completed last Wednesday.
‘Have oil, arrange transportation’
Bangladesh has agreed in principle to provide petroleum products to Nepal, but it has asked Nepal to manage the transportation, NOC said.
“Bangladesh is ready to provide petrol, diesel, aviation fuel and kerosene,” said NOC spokesperson Mukunda Ghimire upon his return from Bangladesh on Thursday. “However, it will not provide cooking gas,” he said.
An NOC team had left for Bangladesh last Saturday after Prime Minister KP Sharma Oli held unofficial talks with Bangladeshi fuel supplier Primo to import petroleum products. Ghimire said NOC had carried out a feasibility study for importing fuel and made an unofficial agreement at the government level. According to Ghimire, talks were held with Bangladesh Petroleum Corporation on Wednesday. If Nepal imports oil from Bangladesh, it will have to be brought through Indian territory. Ghimire said Bangladesh was also ready to supply fuel by air.
The government has been looking into importing fuel from China and Bangladesh in a bid to diversify sources.
Ghimire said NOC could begin importing oil from Bangladesh after a memorandum of understanding is signed at the government level. “If the agreement is signed, Bangladesh has pledged to provide aviation fuel immediately by air,”