Nepal Oil Corporation (NOC) has said it will cost Rs28 billion to boost its petroleum storage capacity to three months of supply.

Currently, NOC has storage facilities at 10 locations that can stock 71,622kl of petrol, diesel, kerosene and aviation fuel—or 20 days of supply based on sales trend of 2014.

“The estimate includes costs for acquiring public and private land plots and developing infrastructure there, not the cost of the fuel to be stored,” said Sushil Bhattarai, acting deputy managing director of the NOC.

After Nepal’s sole fuel supplier Indian Oil Corporation (IOC) curtailed supply as part of India’s trade embargo, the government, through a White Paper in Nov 2015, announced plans to develop infrastructure in different locations to boost the country’s petroleum storage capacity.

In October 2015, National Planning Commission (NPC) had also asked government agencies concerned to work to increase NOC’s petroleum storage capacity fourfold after the blockade exposed Nepal’s precarious supply lines and extreme vulnerability to fuel shortages.

According to Bhattarai, NOC has focused on stationing storage facilities based on the seven provinces provisioned in the new Constitution. 

“We are not in a position to boost capacities of some of our existing depots because of dense human settlements,” he said. “Even in Thankot, where we have 40 ropanies of land, human settlements have been thickening.”

NOC has been considering locations like Panchkhal and Trishuli for building oil storage facilities to supply fuel to the Kathmandu Valley. 

It also plans to build cooking gas storage plants with a capacity of 35,000kl each in Janakpur, Dhading, Mechi-Koshi, Western Region and Mid- or Far-Western regions.

NOC has said it will boost the capacity of its aviation fuel depot in Kathmandu by 4,000kl and hike the storage capacity of its Pokhara depot by 150kl, besides building new storage plants at Jhapa’s Bhadrapur Airport, Bara’s Simara Airport and Rupandehi’s Gautam Buddha Airport.

NOC will also begin work to install new storage plants in Janakpur, Solukhumbu and Dang, and increase the storage capacity of its petrol and diesel depots at Thankot in Kathmandu, Charali in Jhapa, Dhangadhi in Kanchanpur and Bhairahawa in Rupandehi.

The corporation has two gasoline stations in Manthali, Ramechhap. Before embargo, NOC had been working to increase its petroleum storage capacity to 30 days of supply from existing 21 days of supply.