Nepal may allow private firms to import petroleum products

The Nepalese government may allow private companies to import crude oil products to resolve chronic fuel shortages and at the same time end the state’s monopoly on a trade worth about US$1 billion a year. The country buys all its fuel from abroad, with the state-run Nepal Oil Corp. (NOC) as sole importer of the 21,000 barrel per day of crude oil products that the country requires.
But NOC’s insufficient storage capacity, poor transport network and difficulties in paying its sole supplier, Indian Oil Corp., has resulted in frequent fuel shortages and long queues at petrol stations.
“We want to open up the petroleum business to the private sector. Private firms will be able to import, store and distribute petroleum, oil and lubricants just like the NOC does,” said Lal Mani Joshi, chairman of NOC’s board, and the most senior bureaucrat at the Ministry of Commerce and Supplies.
Joshi said a proposal to allow imports by the private sector has been submitted to the cabinet, adding that, “When these guidelines are approved the private sector will be free to import POL products from India or any other country.”
Joshi explained that private firms will initially be allowed to import cooking gas, followed by petrol and diesel fuel. Malika Petroleum Company and another firm have already applied for import permits.
“We hope we can take 10% of NOC’s market share in the first year, and this is expected to rise up to 50 percent in five years,” said Dipak Timalsena, the NOC’s executive chairman. (January 16, 2013)