Chinese authorities have agreed to deliver fuel to Nepal from Kyirong after the two countries sign a commercial agreement, officials of the Ministry of Commerce and Supplies said. The Chinese town of Kyirong is situated across the northern border from Rasuwagadhi in Nepal.

However, the planned commercial deal between Nepal Oil Corporation (NOC) and PetroChina has been dogged by delays since they signed a framework agreement on October 28.

According to a Nepali delegation which visited China to do a feasibility study, Chinese officials have told them that they are ready to deliver fuel to Kyirong if Nepal pays the cost of transportation. Nepali officials have been saying that Nepal Oil Corporation (NOC) cannot transport the fuel from China as it does not have the proper equipment to operate on roads that get snowed under.

Shiva Tripathi, under-secretary at the ministry, said that China was ready to provide gasoline and cooking gas from Kyirong. “They are ready to conduct tanker-to-tanker tran-sfer of gasoline and cooking gas there,” said Tripathi who was also in the study team.

The Nepali delegation had held talks with officials from the commerce department of China and a technical team of Gormut Refinery Company, a subsidiary of PetroChina.

“The technical team has said that it is possible to export fuel to Nepal in any quantity after a government-level agreement is signed,” said Tripathi. He added they carried out a study of various alternative supply points including Chenghai.  

Nepal has been seeking to import fuel from PetroChina’s depot in Shigatse. This is the third time that the government has sent a delegation to China to arrange the import of fuel. Nepal has received a gift of 1,333 kilolitres of petrol from China, and no further shipments have been made for almost two months since then.

With a proposed commercial deal between Nepal and China tantalizingly close but never happening, the government had dispatched yet another delegation consisting of Tripathi and Sushil Bhattarai, the acting deputy managing director of NOC. The team had been instructed to study the feasibility of importing fuel from China through alterative methods.

As per the ministry, the proposed oil pact has snagged on the issue of tax. Nepal has asked China to waive local taxes but it has not confirmed it will do so.

The past delegations sent to China had reported that it was difficult to ship gasoline from Shigatse because of the extreme cold there.

According to Tripathi, China has sought a government-to-government deal. “As it is not possible to send our tankers to the supply point where the temperature can drop to minus 10 degrees Celsius, China has agreed to transport the fuel up to Kyirong in their tankers.”