NOC preparing to reduce fuel prices by more than 2 percent

NOC preparing to reduce fuel prices by more than 2 percent

Nepal Oil Corporation (NOC) is preparing to slash price of petroleum products by more than two percent this time, thanks to significant drop in fuel prices in the rates forwarded by Indian Oil Corporation on Tuesday.

As per the automatic pricing mechanism, NOC, so far, had been adjusting fuel prices by up to 2 percent every fortnight based on the rates sent by its Indian supplier.

IOC had reduced prices of petrol and diesel by two percent each in the Indian market on Monday.

Though NOC was supposed to adjust the new rates on Wednesday, it deferred the plan to study the feasibility of reducing the price by more than 2 percent.

NOC has been drawing flak for making nominal reduction in fuel prices even though global fuel prices have dropped significantly in recent weeks. On Monday, Prime Minister Sushil Koirala had directed Minister for Commerce and Supplies Sunil Bahadur Thapa to do the needful for reducing price of petroleum products in line with the falling global prices.

NOC, however, can reduce fuel prices by more than 2 percent only after making amendment to the working procedures for automatic fuel price mechanism. As per the mechanism, NOC can adjust increase or decrease prices by only 2 percent.

“We have postponed our plan to adjust fuel prices as the Prime Minister and the supplies minister have directed us to reduce fuel prices by more than two percent,” Mukunda Ghimire, spokesperson of NOC, told Republica. “We will hold a meeting with the officials of Ministry of Commerce and Supplies for making amendment to the working procedures.”

Chandika Prasad Bhatta, executive director of NOC, said decision on reducing prices by more than 2 percent could be made on Thursday itself.

As per the price adjustment made on December 1, NOC´s projected profit for the month stands at Rs 510 million. It makes profit of Rs 11.24 per liter on petrol, Re 1 per liter on diesel and Rs 17 per liter of kerosene. It, however, suffers a loss of Rs 290 per cylinder on LP Gas.

Source: Republica