Nepal Oil Corporation’s (NOC) projected monthly losses have dropped to Rs 2.8 million largely due to a fall in global crude prices, and it even expects to make a profit from next month if the trend continues.
According to the state-owned oil monopoly, Brent crude oil plunged to $ 96 per barrel from $ 103 a month ago. Known for being eternally in the red, NOC suffered losses totalling Rs 1.22 billion in March and Rs 33.5 million in August.
The corporation said that if Brent crude oil remained at the current level or declined further, it would start earning profits from next month. Brent crude serves as a benchmark price in the international market.
“We expect to earn a profit from October if the global trend continues,” said Mukunda Ghimire, spokesperson of NOC. He added that NOC had started making profits on diesel sales, which account for around 60 percent of its total petroleum business. The last time NOC had earned a profit was in July 2012. It made a profit of Rs 131 million but the good times lasted for only a month. Earlier, it had reported profits of Rs 3.31 billion in the fiscal year 2008-09.
The new tariff sent on September 16 by Indian Oil Corporation (IOC), its sole supplier, shows that except for liquefied petroleum gas (LPG), NOC will be enjoying profits on all petroleum products. It enjoys a profit of Rs 13.32 on a litre of petrol, Rs 14.22 on a litre on kerosene and Rs 1.07 on a litre of diesel.
Similarly, its profit on a litre of aviation fuel sold to domestic and international carriers stands at Rs 39.41 and Rs 46.63 respectively. However, its losses in the LPG business alone stand at Rs 829.6 million or Rs 553 per cylinder.
IOC reviews export prices of petrol and diesel every fortnight and of other products such as kerosene, aviation fuel and LPG on a monthly basis. Brent crude oil was slightly weaker, staying under $ 98 a barrel on Tuesday, pressured by weak economic data from the world’s biggest energy consumers which pointed to weak demand growth at a time of strong supply, according to Reuters.
Brent crude fell as feared cuts to supply due to violence in the Middle East have failed to materialize, and production resumed at Britain’s North Sea Buzzard oilfield after a series of shutdowns and failed restarts.
The debt-laden NOC’s loans to the government and banks and financial institutions currently stand at Rs 36.66 billion. Its losses were cut to Rs 2.05 billion in the last fiscal year from the previous year’s Rs 9.53 billion.