Nepal Oil Corporation (NOC) has slashed fuel prices in line with the new tariff sent by its sole supplier Indian Oil Corporation (IOC). According to the new price list which went into effect Tuesday, petrol is down Rs 2.50 per litre and now costs Rs 123 per litre. Similarly, diesel and kerosene have become cheaper by Rs 2 per litre each and now cost Rs 97.50 per litre.
The price cuts will have no effect on NOC’s profit curve, however. The state-owned oil monopoly has projected a monthly profit of Rs 512.3 million, an historic figure.
NOC spokesperson Mukunda Ghimire said they slashed petroleum prices as per the latest tariff sent by IOC on December 1. Brent crude oil slumped to below $70 on Friday, its lowest level since 2010, after OPEC decided not to cut oil production.
IOC reviews export prices of petrol, diesel and kerosene every fortnight and of other products such as aviation fuel and LPG on a monthly basis.
This is the fifth revision of petroleum prices in almost two and a half months since NOC adopted an automated price mechanism. Traditionally, the NOC board would determines oil prices, but this time the management was assigned to revise them.
However, the corporation said that LPG prices would not come down. It has been incurring losses of Rs 490 per cylinder of LPG or cooking gas. The corporation racked up losses totalling Rs 2.05 billion in the last fiscal year. NOC owes the government and banks and financial institutions Rs 36.66 billion in loans, money which it borrowed at various times to stave off bankruptcy.
Meanwhile, the Department of Commerce and Supply Management on Tuesday asked the Sajha-operated gasoline station in Madhyapur Thimi, Bhaktapur and Kamakhya Oil Store, Jadibuti, Kathmandu to show up within three days with an explanation after they were caught overcharging customers.