KATHMANDU: Nepal will sign a contract on import of petroleum products from China that has pledged to provide the supplies at an affordable price within a week to the fuel crisis-hit nation following a blockade of its key trade border points with India, officials said today.
After Beijing agreed to provide 1.2 million litres of oil as ‘gift’ to Nepal in the wake of the festival season, Kathmandu will officially seal its first oil trade deal with China, ending India’s monopoly over fuel supplies to the landlocked Himalayan nation.
A seven-member Nepali delegation comprising officials from ministries of foreign affairs, finance, law and Nepal Oil Corporation (NOC) will leave for Beijing tomorrow, Joint Secretary at Ministry for Supplies Shambhu Ghimire was quoted as saying by local media.
Minister for Commerce and Supplies Ganesh Man Pun, who returned from China on Tuesday after holding talks with officials, said they had assured him of supplying petroleum products to Nepal after a week of signing the agreement.
“They want the commercial agreement to be signed as soon as possible. “China has agreed to provide fuel to Nepal at an affordable price as per the need and the government delegation is expected to finalise the deal,” Pun said.
Though Nepal-China signed framework agreement for petroleum trade last month, commercial trade between the petroleum companies has not been signed yet.
Nepal has been reeling under acute fuel shortage due to a blockade of border points with India by protesters led by Indian-origin Madhesis over division of their homeland in the new Constitution. NOC had written a letter to Petro China Company Limited (PCCL) on November 3, inviting it to Kathmandu to sign a commercial agreement.
Commercial agreement with Petro China will break the monopoly of Indian Oil Corporation (IOC), which has been supplying petroleum products to Nepal for the past four decades, in the Nepalese market. According to Pun, there, however, won’t be much difference in price while importing petroleum products from China than from India.
“We have already requested China not to impose dual tax on petro products to be imported by Nepal and they are positive,”he said, adding: “However, a formal agreement is yet to be reached.”
In its letter, NOC proposed Petro China to hold discussion on issues like commercial norms, fuel supply mechanism, routes, fuel rates, supply procedures, and available infrastructures, among others. NOC has also urged China to supply petroleum products from Tatopani customs point instead of Rasuwagadi where trade infrastructure is comparatively weak.
NOC has urged Petro China to deliver LP gas to Kathmandu by using its own bullets, stating that NOC does not have any gas bullets. The state-owned petroleum monopolist has proposed China to supply one-third of Nepal’s petroleum demand.
