DHANKUTA: Minister for Commerce and Supply Sunil Bahadur Thapa has said that the cash-strapped Nepal Oil Corporation (NOC) is likely to emerge as a profit-making entity in the near future.
Thapa, who is currently in his hometown to collect public suggestions on the draft constitution, informed that the corporation had cleared debts of its sole supplier Indian Oil Corporation. “Although we do not have big profits at the moment, we have started depositing some income,” he said at a press meet here on Tuesday.
In a dramatic turnaround, the state-owned oil monopoly put behind the five consecutive years of losses by posting a profit of Rs18 billion for this fiscal year. The NOC had last recorded a profit in 2008-09. It, however, owes Rs21.88 billion to various creditors.
The turnaround was possible due largely to a sharp drop in losses from sales of liquefied petroleum gas (LPG). After adopting an automated pricing system in the petroleum business except for LPG, corporation’s ballooning losses have begun to drop. The latest profits have allowed the NOC to repay loans and interest amounting to Rs14.98 billion mainly to the Citizen Investment Trust and Employee Provident Fund.
Since September 29, 2014, the NOC has been implementing the auto pricing system on petrol, diesel and aviation fuel. However, it still subsidises LPG to the tune of Rs17.28 per cylinder. A cylinder of LPG retails for Rs1,470.
Reiterating commitment to uplift the corporation during his tenure, Thapa said that the NOC used to knock on the doors of the Finance Ministry every so often but the adoption of the automated price mechanism system has ended that trend of asking funds to finance imports.
He added that the government’s proposed commerce policy would be made as per the need of the time and in line with the World Trade Organization obligation.
