Petro dealers threaten to halt distribution

June 25, 2017

The Himalayan Times, 25 June 2017 

Due to the spat between petroleum distributors and Nepal Oil Corporation over loss compensation, Valley denizens could again bear the brunt of supply crunch from July 4.

Citing the state-owned petroleum supplier’s reluctance to raise the loss amount, Bagmati Petroleum Dealers’ Association — an association of around 300 fuel stations in Kathmandu Valley and neighboring districts Kavre, Sindhupalchowk, Nuwakot, Rasuwa and Dolakha — today announced it would stop purchasing petrol from NOC from the aforementioned date.

“We will not sell petrol from our member fuel stations in Kathmandu Valley and neighboring districts from July 4,” said Achyut Bahadur Khadka, president of Bagmati Petroleum Dealers’ Association.

Khadka said after NOC started supplying Euro IV standard petrol from the first week of April, fuel stations have been facing the loss of around 99 liters on the purchase of 4,000-litre tanker from NOC. However, NOC allows deduction of only 35 liters to make up for the loss of every 4,000 liters of petrol and 26 liters deduction for the same volume of diesel. “We have been facing higher loss than what NOC permits us to make up for the loss,” he said.

He said Bagmati Petroleum Dealers’ Association has been demanding for the last two months that NOC raises the loss quantum. The spat between petroleum distributors and NOC has now come to the fore with dealers announcing they will stop purchasing and selling from July 4.

“Dealers are planning to stop distribution to get their demands fulfilled. This will hurt the general public,” said Sitaram Pokharel, spokesperson for NOC. “We raised the loss quantity from 22 liters to 35 on the supply of every 4,000 liters of petrol and from 17 to 26 liters of diesel on August 1 last year,” Pokharel said NOC has urged dealers to check the quantity while loading from the depot. “The dealers’ announcement that they will halt distribution of petrol is against the Essential Commodities Control (Authorisation) Act,” he said.

Though the Essential Commodities Control (Authorisation) Act has listed petroleum products as an essential commodity, protests, and strikes in the supply of essential commodities have been carried out by businesses very often.

Meanwhile, NOC has formed a panel led by Director General of Nepal Bureau of Standards and Metrology Bishwo Babu Pudasaini to study the loss in a bid to resolve the crisis with dealers. “NOC may review the loss make-up facility only after the panel submits a report,” according to Pokharel. However, dealers have alleged that the panel will deliberately delay submission of the report.

Meanwhile, Pudasaini said the panel has already started its work and the report will be submitted very soon.