KATHMANDU: The government has formed yet another committee to study the feasibility of importing oil from China after a succession of previous panels vanished into thin air without the plan of buying petroleum products from the northern neighbour being realised.
According to the Supply Ministry, the government has formed an eight-member committee this time led by its spokesperson Ananda Ram Regmi. Representatives from Nepal Oil Corporation (NOC) and the Commerce Ministry have also been included in the panel.
Regmi said the committee had been tasked with studying the possibility of importing fuel from China. “The previous committees were supposed to study the technicalities. However, the new committee will be studying the whole gamut of oil imports from quantity, prices and quality to import, border issues, mode of transportation and tax issues,” he said. Regmi said the committee had been given a one-month deadline to submit its report.
The government started looking towards China as a potential alternative supplier after the shock of the Indian trade embargo when Nepal’s fuel supplies were cut off leading to extreme hardship for the general public. On October 28, state-owned oil monopoly NOC signed a framework agreement with PetroChina, a state-owned Chinese company, for commercial imports of fuel from China.
After receiving the Chinese government’s gift of 1.3 million litres of petrol, no further progress has been made on the import front so far. Besides the government-formed panels, NOC has also sent a number of its own technical teams to China to study the possibility of trans-Himalayan oil trade. The Indian trade embargo exposed the risks of depending on only one supplier, and the government decided that it would buy 30 percent of the country’s fuel requirement from the northern neighbour.
However, the proposed signing of a commercial agreement was repeatedly delayed due to lack of clarity over double taxation on gasoline oil imports, the government said. The government has been asking China to waive local taxes, but it has not issued any official confirmation on cancelling local tax and export duty. NOC said that it would be able to sell the Chinese product at the same price it charges for Indian products if China waived local tax. With local tax, Chinese petrol would cost Rs170-180 per litre.
