The government on Monday adopted auto pricing mechanism in petroleum—diesel, petrol and kerosene— in a bid to check the ballooning losses.
The auto pricing system, which is expected to eliminate costly fuel subsidies, will come into effect from Tuesday. The new system, however, does not apply to the Liquefied Petroleum Gas (LPG).
According to the auto pricing mechanism, price revision of the petroleum products will be made every fortnightly based on the tariff sent by the Indian Oil Corporation (IOC). IOC reviews export prices of petrol and diesel/kerosene every fortnightly and of other products such aviation fuel and LPG on a monthly basis.
As part of the new pricing strategy, the perennially broke Nepal Oil Corporation (NOC)—has slashed Rs 1.44 on a litre of petrol and 27 paisa on a liter of diesel and kerosene effective from Tuesday.
With the revision, a litre of petrol will now cost Rs. 133.06, while a litre of diesel will now cost Rs. 105.23 in the Kathmandu Valley.
“Finally, we have adopted the auto price mechanism in the oil business which will cut down the bourgeoning loss of NOC and to enable private sector into the oil trade,” said Sunil Bahadur Thapa, Minister for Commerce and Supplies.