Nepal Oil Corporation has started incurring heavy losses as the regular adjustment in the petroleum prices could not be made concurrently with the increase in price of petroleum products in the world market.
The state oil monopoly has been facing losses as the existing market price of the petroleum products in the domestic market is less than the cost price.
Latest projection puts the loss to NOC due to this to be around Rs 977.5 million in the 15 days of this month. NOC has been bearing losses of Rs 65 million daily.
The heavy loss is due to the loss incurred by NOC on the sale of petrol, diesel, kerosene and liquefied petroleum gas (LPG). Nepali market consumes 65,000 kl diesel and 17,000 kl petrol every month, according to the projection of Nepal Oil Corporation.
As per the price list sent by the Indian Oil Corporation (IOC) on Monday, NOC has to pay it Rs 51.69 per litre of petrol, Rs 52/39 per litre of diesel, Rs 48.76 per litre of kerosene and Rs 48.05 per litre of aviation fuel for the first fortnight of February. Similarly, NOC will have to pay Rs 1129.81 per cylinder of LPG to the IOC.
Tax is imposed under various headings in the price list sent by IOC. The cumulative tax comes to be around Rs 116.80. This means that the cost price for NOC is Rs 97.67 per litre of diesel, Rs 74.90 per litre of kerosene, Rs 63 per litre for domestic aviation fuel and Rs 1,675.11 per cylinder of LPG.
Nepal Oil Corporation has fixed the selling price of petrol at Rs 110 per litre, of diesel and kerosene at Rs 93 per litre, of domestic aviation fuel at Rs 65 per litre and of international aviation fuel at USD 0.868 per litre. The selling price of LPG is Rs 1,375 per cylinder.
Nepal Oil Corporation is incurring loss of Rs 6.80 per litre of petrol, of Rs 4.67 per litre of diesel, of Rs 18.10 per litre of kerosene and of Rs 317.11 per cylinder of LPG while it has been earning Rs 2 per litre of domestic aviation fuel and Rs 35.87 per litre of international aviation fuel.