Laxmi Capital News
NOC ups fuel price while int'l price falls marginally

Nepal Oil Corporation has hiked fuelprices regularly under an automatic pricing mechanism in the last seven months.The steady price hike has impacted the price of daily commodities, and airfaresare also to increase by Tuesday. NOC’s latest price hike comes against a fallin international prices. 

Consumeractivists claim that the price hike is the result of collusion betweenofficials of NOC and the Indian Oil Corporation, the sole supplier of fossilfuels to Nepal.

NOC has hiked fuel prices effective fromSunday by Rs 3 per liter for petrol and diesel/kerosene. 

The price of crude oil in theinternational market is on a decreasing trend. It fell from US$ 68.23 to US$67.10 per barrel between May 30 and June 1, according to Reuters. Crude perbarrel fell by over US$ 1.13 (Rs 120.91) but NOC has increased the prices by Rs3 to Rs 28 per liter for different kinds of fuel. 

Fuel prices in the Nepali market haveseen a continuous rise since November. Prices of diesel and kerosene, whichhovered in a Rs 74 to 75 range in early November, have jumped by nearly 30percent in the past seven months to Rs 95. Likewise, petrol has soared by 15percent in the past six months to Rs 113. Moreover, the price of air turbinefuel (ATF) used in domestic flights has increased by nearly 15 percent to Rs100 since early December. ATF for international flights has increased by nearly27 percent to US$ 1,075 per 1,000 liters in the same period. 

Talking to Republica, BishnuTimalsina,general secretary of the Forum for Protection of Consumer Rights, said that theabrupt price hike is unnatural. “It seems there is collusion between the IndianOil Corporation and NOC in the artificial price hike in Nepal though the pricehas remained the same or even fallen in recent weeks. However, he did notelaborate. 

Timalsina also blamed the growing use ofLPG for commercial purposes, resulting in greater losses for NOC, whichtransfers this loss to the general consumer by hiking the price of other fuels.LPG has seen price hikes only twice, from Rs 1,325 to Rs 1,350 and again to Rs1,375. 

NOC officials tried to appear clean byreferring to Indian Oil price rates which are received every 15 days.BirendraGoit, spokesperson of NOC, said, “We have increased the price of fuelbased on the price list provided to us by Indian Oil.” 

Reuters’ figures show that the price offuel has fallen in the international market over a period of 15 days. Crude wasUS$ 71.54 on May 16 and fell to US$ 65.7 in the last 15 days of May with slightincrease on May 21 to US$ 72.57. 

NOC is earning a profit of Rs 1.95 perliter on kerosene along with Rs 2.86 and Rs 25.36 respectively per liter indomestic and international ATF. Meanwhile, NOC bears a loss of Rs 3.74 perliter of petroleum, Rs 28.54 per liter of diesel and Rs 16.52 per cylinder ofLPG.

Critics say the high tax rates andsurcharges have also contributed to higher prices. The government levies Rs38.86 on a liter of petrol, Rs 10.93 on a liter of diesel, Rs 2.98 on kerosene,Rs 19.63 on domestic ATF, Rs 6.19 on international ATF and Rs 222.13 percylinder of LPG.

Source: MyRepublica, 5thJune 2018

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