By A Staff Reporter
Kathmandu, Jan. 23: The government has decided to provide Rs. 1.80 billion to the Nepal Oil Corporation (NOC) from the Price Stabilisation Fund (PSF) to ease the supply of petroleum products.
The government has made that decision to offset the NOC’s mounting losses resulting from the rise in the price of crude oil in the international market.

A meeting of the Fund held on Friday gave NOC the authority to use the shortfall amount from the Fund to pay for Indian Oil Corporation (IOC), said the NOC. It will have to pay Rs. 2 billion as the second installment to the IOC on January 23.

Even though it hiked the price of petroleum products on Wednesday, it has been incurring a fortnightly loss of Rs. 1.88 billion.
Owing to a series of loss, the accumulated savings of the NOC has been exhausted.
As the reserve profit fund has also been exhausted, it is now left only with the PSF as a last resort to continue importing petroleum products.

Once that Fund is also depleted, there is no alternative but to adjust the price of oil according to the cost. According to Binitmani Upadhyay, spokesperson for the NOC, the government has made arrangements for the second installment to be paid by it.
"NOC is short of Rs. 2 billion to pay for the IOC on January 23. Out of that, Rs. 1.80 billion has been managed," he said.

Petroleum Price Stabilisation Fund was established seven years ago to maintain price stability in petroleum products.
According to spokesperson Upadhyay, about Rs. 6.20 billion is now left with the Rs. 8-billion fund after the use of Rs.1.8 billion.
As per the provision of the Fund, 1 per cent of the fuel price is deposited in it.

According to the NOC, about Rs. 19 billion saved by the NOC for seven years emptied in just six months importing fuel. It has incurred a loss of Rs. 19.26 billion in the first six months of the current fiscal year.
Earlier, the NOC has increased the price of petrol, diesel and kerosene by Rs. 3 per litre each and price of aviation fuel for domestic flight by Rs. 5 per litre and that for international flight by USD 100 per kiloliter.

Even after adjusting the fuel price, the NOC still faces a loss of Rs. 10.72 per litre in petrol and Rs. 6.33 per litre in diesel, it said.
Besides, it is facing a loss of Rs. 646.16 per cylinder of cooking gas.