Laxmi Capital News
Nepal-China fuel trade discussions gain momentum

Thecountry’s plan to start petroleum trade with China, which had been pushed tothe backburner in recent years, has once again gained momentum with theformation of Prime Minister KP Sharma Oli-led government.

Thoughthe government had sealed a framework deal to import petroleum products fromthe northern neighbour in October of 2015 when Oli was the prime minister backthen too, no further progress could be made on this agreement in the last twoyears along with the change in the government and priorities.

However,officials at the Ministry of Supplies (MoS) informed that internal discussionsand bilateral talks with Chinese authorities have been resumed to diversify thecountry’s gasoline industry, especially after the formation of the newgovernment.

“Asthe demand of petroleum products in the country has been surging every day,discussions have been initiated recently to diversify Nepal’s fuel industry andanalyse the prospects of starting commercial fuel trade with China,” informedan official at MoS seeking anonymity.

Stungby the blockade in the southern border during the Tarai unrest in 2015 thatresulted in acute shortage of petroleum products in the country, Nepal hadearlier sealed fuel trade deal with China. A memorandum of understanding (MoU)to this effect was signed between Nepal Oil Corporation (NOC) and PetroChina CoLtd, a subsidiary of state-owned China National Petroleum Corporation,regarding supply of petroleum products from China to Nepal on October 28, 2015.

Thisagreement had not only paved way for the two countries to start fuel trading,but had also ended Nepal’s sole dependency on India for supply of petroleumproducts.

Alongwith the government’s plan to import one-third of the consumption volume ofpetroleum products from China, NOC and PetroChina had then held discussions onthe quality, quantity, price, loading capacity, loading method, and the routeto bring gasoline to Nepal.

However,Supplies Secretary Anil Kumar Thakur said that both Nepal and China shouldfirst give priority to address the infrastructure bottleneck to enter intocommercial fuel trading.

“Startingcommercial fuel trade with China is the best way to diversify country’s fueltrade. However, the state of infrastructure, especially in Nepal’s side is poorto materialise the plan to begin fuel trade with the northern neighbour,” hesaid.

Source:The Himalayan Times, 28th February 2018

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