Days after the biggest global price fall, Nepal Oil Corporation slashes fuel pricesThe decision does not really bring relief to consumers as the oil monopoly is still busy counting profits and losses, economists and consumer rights activists say.
The impact of the Covid-19 pandemic on the global economy also led to low demand for oil. Brent crude futures, the global oil benchmark, were down 22 percent, last week closing at $35.45 per barrel.
General people and airlines operators have been expecting that the biggest fall in crude oil in the international market could cheer the domestic market with big price cuts.
But on Monday, when the Indian Oil Corporation, Nepal’s sole oil trading partner, sent the revised list of oil prices, criticism poured into the oil monopoly for cheating consumers at the time of crisis.
Nepal Oil Corporation reduced the price of petrol, diesel and kerosene by Rs2 per litre and domestic aviation fuel by Rs4.50 per litre, with effect from Monday midnight. After the revision, the oil monopoly said it will boost its fortnightly profit to Rs540 million or more than Rs1 billion monthly.
The corporation clarified that petrol, diesel and kerosene prices are revised fortnightly while aviation fuel and cooking gas is revised on a monthly basis. As a result, the price of aviation fuel sold to international airlines and liquified petroleum gas has remained the same.
Birendra Goit, spokesperson for the corporation, said that in view of struggling domestic airlines, they have reduced the price by Rs4.50 per litre although the prices should be reviewed on a monthly basis. “We have a profit of Rs8 per litre on the fuel sold to the domestic airlines. We take profit of Rs46 on a litre of fuel sold to the international airlines.”
He said that losses on a cooking gas cylinder is at Rs291. But cooking gas new price list will come on April 1 only.
Prem Lal Maharjan, president of National Consumer Forum, said the adjusted price is unnatural and not justifiable. The price of fuel has decreased by more than 25 percent in the international market. But the oil monopoly reduced only Rs2 on a liter. “This is not justifiable. The corporation is exploiting the consumers at the time of a pandemic situation.”
He said that the corporation is not allowed to keep such a big profit.
“Consumers could not feel the presence of the government as they were forced to queue long at petrol pumps on Sunday and Monday despite the government assuring that there is sufficient supply of fuel,” Maharjan told the Post. “Such lack of accountability and responsibility of the government creates mistrust among consumers.”
Bishwamber Pyakurel, an economist, said that the price adjustment of the corporation is a disconnected policy with people.
“Consumers could not feel the impact of decreasing oil prices in the global market as the government’s revenue oriented policy will keep consumers in pain,” he said.
“With the adjusted price, consumers should feel that the government is serving the people. But that’s not happening because the market is run by cartels.”
In a recent interview with the Post, Surendra Kumar Paudel, general manager of Nepal Oil Corporation, had said people need to understand that crude oil is bought and sold internationally in dollars.
“When an Indian company imports crude oil, it needs to pay in dollars,” he said. “As we import fuel from India, and despite a significant fall in crude oil prices over the last five years, the price of petroleum has remained the same due to the appreciation of the US dollar against the Nepali rupee.”
Frequently asked questions about the coronavirus outbreak
UPDATED as of April 4, 2020
What is Covid-19?
Covid-19, short for coronavirus disease, is an illness caused by the coronavirus SARS-CoV-2, short for severe acute respiratory syndrome coronavirus 2. Common symptoms of the disease include fever, dry cough, fatigue, shortness of breath and breathing difficulties. In severe cases, the infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.
How contagious is Covid-19?
Covid-19 can spread easily from person to person, especially in enclosed spaces. The virus can travel through the air in respiratory droplets produced when a sick person breathes, talks, coughs or sneezes. As the virus can also survive on plastic and steel surfaces for up to 72 hours and on cardboard for up to 24 hours, any contact with such surfaces can also spread the virus. Symptoms take between two to 14 days to appear, during which time the carrier is believed to be contagious.
Where did the virus come from?
The virus was first identified in Wuhan, China in late December. The coronavirus is a large family of viruses that is responsible for everything from the common cold to Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). After an initial outbreak in Wuhan that spread across Hubei province, eventually infecting over 80,000 and killing more than 3,000, new infection rates in mainland China have dropped. However, the disease has since spread across the world at an alarming rate.
What is the current status of Covid-19?
The World Health Organisation has called the ongoing outbreak a “pandemic” and urged countries across the world to take precautionary measures. As of Wednesday, Covid-19 had spread to 204 countries and infected more than 1,098,762 people with 59,172 deaths. In South Asia, Pakistan has reported the highest number of infections at 2,686 with 40 deaths. While India has reported 2,547 confirmed cases with 62 deaths. Nepal has so far reported six cases, in which one patient recovered.
How dangerous is the disease?
The mortality rate for Covid-19 is estimated to be 3.6 percent, but new studies have put the rate slightly higher at 5.7 percent. Although Covid-19 is not too dangerous to young healthy people, older individuals and those with immune-compromised systems are at greater risk of death. People with chronic medical conditions like heart disease, diabetes and lung disease, or those who’ve recently undergone serious medical procedures, are also at risk.
How do I keep myself safe?
The WHO advises that the most important thing you can do is wash your hands frequently with soap and water for at least 20 seconds or use hand sanitizers with at least 60 percent alcohol content. Avoid touching your eyes, nose and mouth with unclean hands. Clean and disinfect frequently used surfaces like your computers and phones. Avoid large crowds of people. Seek medical attention if symptoms persist for longer than a few days.
Is it time to panic?
No. The government has imposed a lockdown to limit the spread of the virus. There is no need to begin stockpiling food, cooking gas or hand sanitizers. However, it is always prudent to take sensible precautions like the ones identified above.