Nepal Oil Corporation (NOC) promised to form a technical committee to resolve the problem of shrinkage loss that gasoline stations have been facing after they threatened to stop taking deliveries.

Oil dealers in the Kathmandu Valley, Nuwakot, Dhading and Kavrepalanchok warned Saturday that they would stop buying gasoline if NOC did not deal with the problem soon.

They said that they were having to take heavy losses as the state-owned oil monopoly had been giving them short measure. Shrinkage loss refers to gasoline lost due to shrinkage and evaporation.

“We will stop receiving load from NOC depots from July 4 if it does not do something about shrinkage loss,” said Achyut Bahadur Khadka, president of the Bagmati Petroleum Dealers Association.

According to him, NOC has been supplying up to 90 litres short on every measure of 4,000 litres of petrol.

NOC Managing Director Gopal Bahadur Khadka said they would form a technical committee including a representative of petroleum dealers. “Based on

consensus, we will revise the current provision of shrinkage loss,” said Khadka.

As per NOC, shrinkage loss occurs in fuel shipments when they are transported from locations with a high temperature to cooler places. NOC has been compensating petroleum dealers for shrinkage loss at the rate of 5 litres per 1,000 litres of petrol, Khadka said. “In the case of diesel, NOC regulation has considered an evaporation loss of 2.6 litres per 1,000 litres.”

Fuel sellers, however, said that the problem got worse after NOC started importing Euro IV standard gasoline from April. According to them, a shipment of 3,000 litres of petrol supplied to Rushcutter Petrol Pump, Kirtipur on May 4 was 56 litres short while its shipment of 3,000 litres of diesel was 48 litres short.

Umesh Baniya, a petroleum entrepreneur based in Kavrepalanchok district, said they had been facing similar problems time and again. He blamed the traditional and defective calibration system adopted by NOC for the problem.

NOC has been using a ‘deep rod’ device to measure the fuel supplied to gasoline stations.

According to Baniya, they will stop selling petrol for three days from July 4 if NOC does not address their problem. “From July 7, we will shut down our outlets completely,” he said.

The Essential Goods Protection Act 1955 has considered petroleum products as an essential item. The act has barred fuel sellers from launching protests and disrupting supplies.

“Since gasoline is an essential item, we have given the concerned authorities adequate time to sort things out,” Baniya said.