‘Prices may rise again as losses still high’Nepal Oil Corporation (NOC) has said it might need to hike fuel prices again after ramping up the rates for the third time in a month, moaning that its projected loss for January stands at a staggering Rs264 million.
Nepal Oil Corporation (NOC) has said it might need to hike fuel prices again after ramping up the rates for the third time in a month, moaning that its projected loss for January stands at a staggering Rs264 million.
On Monday, the state-owned oil monopoly raised the price of petrol, diesel and kerosene by Rs1 per litre to Rs102, Rs79 and Rs79 respectively.
Likewise, cooking gas has become dearer by Rs25 per cylinder and now costs Rs1,375. The price of aviation fuel has gone up by Rs3 per litre to Rs90 per litre for domestic airlines, and by Rs5 per litre to Rs90 per litre for international airlines.
NOC had last raised fuel prices on December 8 and 19. The price of cooking gas has swelled by Rs75 per cylinder in the past month. Currently, NOC has been making profits on the sale of petrol, kerosene and aviation fuel. According to the public enterprise, it earns a profit of Rs2.83 per litre of petrol, Rs15.80 per litre of kerosene, Rs15.02 per litre of aviation fuel sold to foreign carriers and Rs29.14 per litre of aviation fuel sold to domestic airlines. It loses Rs208.30 per cylinder of cooking gas sold and Rs2.71 per litre of diesel sold.
NOC Spokesperson Birendra Kumar Goit said NOC was compelled to raise fuel prices in accordance with the price list of Indian Oil Corporation which has revised the tariff in line with prices in the international market.
“Over the last few months, the price of fuel has soared to $66.60 per barrel from $40 per barrel,” Goit said. “That’s why the enterprise has been forced to raise the price to minimise its financial loss.” NOC has been adopting the automated pricing system on petroleum products except cooking gas since September 29, 2014. Over the period, the financial position of the enterprise has improved, and it started making a profit from the fuel business.
“However, it could not revise prices during the past few months due to the occurrence of festivals and local, State Assembly and House of Representatives elections even though global prices were soaring,” Goit said. “Had we not revised prices, the monthly loss would have crossed Rs1 billion.”
As per the Petroleum Products Auto Pricing System Bylaw, NOC can reduce the price at any time by any percentage point, but it can increase prices of petrol, diesel and kerosene by only 2 percent at a time. Likewise, it is permitted to hike the price of cooking gas by Rs25 per cylinder at a time.
According to Goit, NOC has around Rs3.31 billion in the Price Stabilisation Fund. The purpose of the fund is to help the enterprise make up for losses when world prices
go up sharply. However, NOC has been increasing the price repeatedly despite the provision.