Nepal Oil Corporation's losses mount as fuel prices are not adjusted

Nepal Oil Corporation's losses are growing because fuel prices are not being adjusted under the automatic pricing system. The corporation has not changed petroleum product prices since Shrawan 17.

Although the new price list sent by the Indian Oil Corporation on Asoj 14 showed higher prices, the corporation has kept its selling prices unchanged. According to the corporation, under the new list, diesel and petrol are about Rs 20 per litre costlier, kerosene about Rs 16 and aviation fuel about Rs 19. The price of cooking gas has risen by about Rs 81 per cylinder.

Because of this, the corporation estimates it will lose about Rs 3.2 billion in the next 15 days. In the previous 15 days, the corporation had incurred a loss of about Rs 1.92 billion.

Executive Director Nagendra Sah said the total loss since Shrawan 17 has reached about Rs 5 billion. He said the decision not to raise prices now was taken because diesel becoming costlier during Dashain and Tihar would push up freight charges and market prices.

Sah said the corporation has no loans and that about Rs 4 billion is kept in the Price Stabilisation Fund. About a decade ago, in a similar situation, the corporation's losses had reached about Rs 38 billion. The corporation covered that loss by not cutting prices when international prices had fallen.