First Business News Portal in English from Nepal
KATHMANDU: 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.
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