Petrol and Increasing

In every month or two, we can see people gathering petrol pumps in around the city. Most of the vehicles, two wheelers and four wheelers can be seen in front of the gas stations waiting for their turn to fill up their empty tanks. When they could fill up the tanks, then all of them at least seem happy. They enjoy like they have just won a war against some huge enemy and they won, after all they have to stay there for hours.  But all the time all of the tanks could not get their part, and they move out for the other petrol pumps. The only petroleum distributor in Nepal is Nepal Oil Corporation (NOC) and it does it work in its own way.  No other companies are allowed to import petroleum from other countries. The monopoly prevails and will be continuing for some more time.

Nepal has no source of petroleum. We even don’t have the proper survey for the petroleum product extraction. Nepal is totally dependent on India and other third countries for oil. Thus the overall change in prices of the world directly impacts our petroleum. The petroleum consumption rate is ever increasing in Nepal and we even don’t have the proper mechanism research and formulate the other alternative energy sources. The petroleum is being used in domestic cooking, transport, industries, and all.In current market scenario the petroleum demands are increasing at a high rate and similar is the prices. In international market the petrol prices has been is increasing due to various factors and inflation rates of the producing countries.  Nepal is getting suppressed in the petroleum market due to the inability to mitigate the international prices and the Nepalese prices. Not only that the previous loan amounts with the Indian Oil Corporation is also a setback for Nepalese Petroleum supply and distribution. Nepal don’t have the sufficient storage facility for the Petroleum. The increase in storage capacity over the years in line with the growth in the demand of petroleum products is quite impressive. The present storage capacity of 71,558 kiloliters is, however, just enough for 15 days national sales based on the projected sales for 2009. To maintain the same level of storage facilities NOC has to constantly increase its storage facilities. Therefore the NOC management is giving adequate attention to the expansion of storage facilities. Currently, it is working towards developing storage facilities for petroleum products to meet the demand of at least 30 days.

With the increase in vehicles and energy demands the petroleum demand are increasing in the country. We do not have proper energy distribution in Nepal and in lack of alternative energy sources we are more dependent on the petroleum. The hydropower is too low to meet up the regular demand and in such situation the demands for petroleum goes up for running of generators and other power equipments. Thus to meet up the demands NOC imports more petroleum  products from India which is the only petroleum source for Nepal.

In order to mitigate the loss occurred in distribution and pay off the previous loans NOC raises the Petro-prices from time and again. The corporation has recently raised the prices of all the petro products to do the same. The corporation is also getting financial support from the government and other financial institutions in order to maintain the demands and supply but still we can face the shortages of petroleum supplies. The corporation is unable to meet the demands of coking gas and petroleum which forced the public to raid the filling plants of gas cylinders to meet up their cooking needs. The corporation has already received billions of Nepalese Rupees to import and pay off the loan amount to Indian Oil Corporation (IOC), in terms of loans and support. The corporation is too weak in management to control the leakage and black marketing of the petro-products. The management is unable to figure out the real solution and the government is not letting out the privatization of Petroleum imports into the country. The political big-figs are hiding out the true facts and could not enable the privatization of the corporation or distribution mechanism.

For the true solution of these shortages and meet the energy demands of the country, the government should prioritize and support the alternative energy sources. The government should be able to control the black marketing of the petroleum and related laws and rules should be firmly established. Other wise the demand and the prices will be increasing in a un managed way ultimately affecting the whole country. This will ultimately hamper the whole country in every aspects leading to a breakdown in the economical development. This is the right time to think about the real issue and figure out the Solutions, before it’s too late.