Nepal Oil Corporation (NOC) has sought Rs 1 billion in loans from the government to beef up stock of petroleum products, citing political deadlock and Maoist´s strike threat that could hit supplies in the days to come.
Digambhar Jha, NOC chief, who forwarded a letter to this connection to Ministry of Commerce and Supplies on Monday, said NOC´s storage tanks across the country have less than two-thirds fuel in stock at present.
Given its recent deteriorating fund flow, NOC has said that it would not be able to replenish stock from its own resources.
"When we were making profits, we served interests and loans. But we have continued to operate with net loss for the last four months," Jha told Republica.
NOC has argued that loan was needed for building up strategic stock so that it could continue to maintain supplies in case political fiasco continued and unfortunate mishaps struck the country.
The request from NOC comes at a time when it still has loans of over Rs 7 billion to repay to the government. It had taken those loans to finance imports over the span of four years when government´s continued apathy to adjust domestic oil prices in line with import rates turned it bankrupt.
NOC said it has just about 18,000 kiloliters (KL) of diesel in stock, which is far less than its storage capacity of 42,370 KL. Likewise, its nationwide petrol stock stands at 3,030 KL, which is about 60 percent of its total storage capacity. Its kerosene stock stands at 11,800 KL, which is three-fourths of its storage capacity, and aviation fuel stock stands less than two-thirds of its capacity.
Stock of fuel at Thankot, the main supply outlet for the Kathmandu Valley, stands much lower than our national average stock, Jha said.
"We have continued to serve loans whenever we could. But to prepare for possible adverse situation, we still have no option but to turn to government for finances," he said, referring to recent rise in loss figures of petroleum import monopolist.
The government has continued to adjust prices of oil over the last four months, when international crude prices started to jump. However, it has preferred to left prices of liquefied petroleum gas (LPG) untouched. This single product accounts for more than two-thirds of the total loss of NOC.
The latest import rates and fund flow estimates of NOC show it will suffer a loss of Rs 190 million -- from its estimated loss of Rs 310 million in the month of May -- from LPG business alone.
"Our loss figure on diesel too has jumped to Rs 4.10 per liter this month from about Rs 3 of April," Jha said.
Meanwhile, NOC has reported a loss in its profit margin from aviation fuel to Rs 8 per liter from Rs 15 of the past and kerosene to Rs 4 per liter from Rs 7 of April.
Due resurfaces with IOC
As NOC imported more fuel than what it actually paid to the Indian Oil Corporation (IOC), its outstanding due to its sole supplier of fuel has surfaced yet again. "As at April end, we have some Rs 340 million in outstanding account to settle to the IOC," said Jha.
He said rise in volume of consumption and NOC´s downturn fund flow over the last few months were behind the reemergence of the situation.
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