Alternative hypothesis – Shortage of petro products

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    Petrol-Pump‘Is there no end to the stop-start petroleum supply chain and the recurrent protests and bandas against every round of petro price hike?’ common folks are asking. In the latest development in this saga, petrol pumps have shut down after the Indian Oil Corporation (IOC), Nepal’s sole oil provider, cut down supplies by 30 percent; Nepal Oil Corporation (IOC), our sole oil importer and distributor, apparently failed to pay up on time. This comes hot on the heels of the latest round of petro price hike, which was partially rolled back after vehement protests from student unions and consumer groups. In response to the protests, a parliamentary panel was formed to study problems in distribution of petro products and recommend reforms in NOC. We certainly hope that something good comes out of it and there will be a permanent, scientific method to adjust the price of petro products in accordance with the international prices as well as the special needs of the domestic market. Yet we are also deeply skeptical. The past records of such panels have been dismal; even their well-meaning recommendations have seldom been implemented. It will also be another month before the committee comes out with any recommendation.

    The problem, as we see, is not in the supply but the demand side. The reason our petro bills have been increasing disproportionately every year is that there is a severe energy crisis in Nepal. Perhaps half the imports could be done away with if we could supply year-round electricity. Hydropower is certainly the first option for a water-rich country. Successive governments promise to do away with load-shedding in the next five to 10 years through big hydro projects. But at the end of the day, nothing comes out of it save a whole lot of disappointment for the people forced to live in the dark, year in and year out. Solar power is another option. Many streets in Kathmandu are already being lighted by solar panels. Solar experts claim that if the government shifts its focus from hydro to solar power and proper incentives are provided to the promoters of solar energy, this single option would be sufficient to do away with power cuts entirely. There have indeed been some credible studies on the viability of solar power in Nepal and they are mostly optimistic. The icing on the cake would be that solar power would be completely pollution free, a big boon for a country whose air quality has just been rated the second worst in the world.

    International oil prices are primarily determined by the Organization of the Petroleum Exporting Countries (OCEC), a cartel of major oil producing nations. OCEP members are least concerned about hardships to the people of undeveloped world, the primary victims of their arbitrary oil pricing. In the long run, relying on dwindling international oil reserves to meet our energy needs is flirting with disaster. Unless Nepal can harness its own, ever- growing fuel demands will soon make it bankrupt. The hard truth for Nepalis is that oil prices always go up—always. Even when the international market prices come down, subsidies have to be factored in. What this essentially means is that unless there is genuine effort to wean the country off oil, our energy crisis will go from bad to worse.

    Source : Republica