KATHMANDU Jan 16 Nepal's government is
considering allowing private companies to import crude oil
products which would resolve chronic fuel shortages and end the
state's monopoly on a trade worth about $1 billion a year, a
trade ministry official said on Wednesday.
Nepal buys all its fuel from abroad and state-run Nepal Oil
Corporation (NOC) is currently the sole importer of the 21,000
barrels per day of crude oil products the country needs.
NOC, however, is plagued by insufficient storage capacity, a
poor transport network and difficulties in paying its sole
supplier, Indian Oil Corp, creating frequent fuel shortages and
long queues at petrol stations.
"We want to open up the petroleum business to the private
sector. Private firms will be able to import, store and
distribute petroleum, oil and lubricants just like the NOC
does," said Lal Mani Joshi, the most senior bureaucrat at the
Ministry of Commerce and Supplies and chairman of NOC's board.
A proposal to allow imports by the private sector has been
submitted to the cabinet, Joshi said, adding that it was not
immediately clear when it would be approved.
"When these guidelines are approved the private sector will
be free to import POL products from India or any other country,"
Private firms will initially be allowed to import cooking
gas, followed by petrol and diesel, he added.
At least two private sector firms, including Malika
Petroleum Company, have already applied for import permits.
"We hope we can take 10 percent of NOC's market share in the
first year, and this is expected to rise up to 50 percent in
five years," said Dipak Timalsena, the company's executive
(Reporting by Gopal Sharma and Jo Winterbottom; Editing by