Nepal to end state monopoly of oil industry

Nepal has finalized the Petroleum Products and LP Gas bill which will end state monopoly in the petroleum sector. The bill will require a paid-up capital of Rs 20 billion (US$280.5 million) for private companies who wish to import crude oil and operate a refinery and Rs 10 billion (US$140.2 million) for importers and traders of refined products. LPG importers and bottlers will have a lower capital requirement of Rs 3 billion (US$42.3 million). “The huge capital requirement has been provisioned just to make sure that only competent and quality players jump into the business,” said a member of the bill drafting committee who was quoted by a local publication. If passed, the state-owned Nepal Oil Corp. (NOC) will have to raise its paid-up capital, which is currently at Rs 96.7 million (US$1.3 million). The bill also will end the regulatory function of NOC and will moot the establishment of a seven-member Nepal Petroleum Authority (NPA) to monitor and regulate the sector. (July 6,2011)