The monopoly of state-owned Nepal Oil Corporation (NOC) in import of petroleum products is set to end with the government giving permission to nine private sector companies to import and sell petroleum products like the NOC does.
But these companies will not get to import immediately. These companies will have to prepare infrastructure necessary to import petroleum products within two years, according to the Department of Supply Management and Consumer Right Protection. A meeting of the Petroleum Products Management and Regulation Committee chaired by Secretary at the Ministry of Supplies Sridhar Sapkota has given the first stage of permission for these companies.
Two companies have received permission for import and trade of all kinds of fuel, one for cooking gas and six for liquid fuel. “This permission has paved the way for private sector to develop infrastructure needed for petroleum products,” Spokesperson at the department Laxman Shrestha said. The department will award the final permission two years later after seeing whether the companies have built requisite infrastructure. The NOC has had monopoly in petroleum products for the last 40 years.
Permission for the private companies has been granted as per the Petroleum and Gas Transaction (Regulatory) Order 2013. Birat Petroleum, Sonapur Mineral Oil, National, Himalayan, BB and Trans Himalayan Petrol, Diesel and Kerosene have received permission for liquid fuel and Avinash Energy for cooking gas. Malika and Petroleum Max have received permission for all kinds of petroleum products.
Malika had received permission for import of liquid fuel in October, 2015 while the decision for gas has been taken now. The department revealed that Malika, however, has not come to get permission for gas. “The private companies will sign agreement with foreign companies to trade petroleum products within the next two years. They will also have to develop their own network inside the country for sale and distribution,” Shrestha stated.
The companies should have capacity to store at least 20,000 kiloliters of liquid fuel, three vehicles to transport petroleum products and necessary commercial network for sale and distribution. That receiving permission for cooking gas should have vehicles to transport gas, insurance for the storing site and insurance of workers. It should also have capacity to store 500 tons of gas, 20,000 cylinders and safety equipment including fire extinguishers.
The companies must have paid-up capital of Rs 10 billion for importing liquid fuel, Rs 5 billion for importing gas and Rs 500 million for refilling gas. Any company wishing to refine petroleum products should have paid-up capital of Rs 20 billion. The companies should have five percent of paid-up capital while taking the first permission. The NOC has been importing petroleum products worth over Rs 100 billion a year.
Source : Karobar daily