Plans are afoot to establish two more oil depots as part of the government’s plan to increase reserves of petrol, diesel, kerosene and aviation fuel for at least three months of consumption.

The government is currently making preparations to allow the Nepal Army to build a petroleum storage facility at Panchkhal in Kavrepalanchok district. Likewise, state-owned petroleum monopoly Nepal Oil Corporation (NOC) has agreed to build a storage plant in Rasuwagadhi soon.

The Supplies Ministry, which is overseeing these issues, has forwarded a proposal to construct the two storage plants to the cabinet for final approval, said Surya Prasad Shrestha, spokesperson for the ministry.

According to the Supplies Ministry, a multilateral meeting held at the ministry few days ago agreed to assign the task of building a fuel storage plant in Panchkhal to the Nepal Army. “As the Nepal Army holds adequate land in the area, the government is allowing it to build the oil depot there,” said Shrestha.

The government moved to expand the oil storage capacity after the country was crippled by a severe fuel shortage during last year’s four-and-a-half-month-long trade blockade by India. The embargo ended in February.

The government has also touched upon the issue of raising the fuel storage capacity in its budget statement for 2016-17. “In order to regularise the supply of petroleum products and increase the storage capacity of NOC to be able to fulfill the requirement for a minimum of 90 days, land acquisition, preparation of a detailed project proposal and resource management will be completed and construction will be initiated at Panchkhal in Kavrepalanchok, Khairanitar in Tanahu and Battar-Betrawati in Nuwakot,” the budget stated.

Meanwhile, NOC has decided to build a storage plant in Rasuwagadhi from the profits it has earned so far. “NOC has expressed its commitment to start buying the required land to build the depot,” said Shrestha.

Shrestha said the ministry was currently assessing the cost of building the two proposed fuel storage plants.

The government is planning to build at least one oil storage plant in each of the seven proposed provinces. The Supplies Ministry is considering assigning the security forces to construct the depots in the rest of the provinces.

Shrestha said the ministry wanted to give the task to the security forces as other government agencies may face problems in land acquisition.

Earlier, China had also expressed interest in constructing storage plants in Panchkhal and Rasuwagadhi.