China to supply petroleum to Nepal

KATHMANDU: China has agreed to supply petroleum products to Nepal to overcome the Himalayan nation's oil crisis that has forced the government to cut supply and mull hike in prices to save on the scarce commodity.

A high-level Chinese delegation met Prime Minister Girija Prasad Koirala at his residence in Baluwtar today and expressed Beijing's willingness to supply petroleum products to Nepal. The delegation is led by Li Yu Lan, deputy governor of China's Guangdong province.

According to Koirala's foreign affairs adviser, Suresh Chalise, it is the first time China has assured Nepal of supplying petroleum products in a formal manner. Earlier, the Chinese ambassador to Nepal had told Prime Minister Koirala that China was ready to export petroleum products to Nepal.

Chinas assurance has come at a time when the government is mulling cut in oil subsidy and hike petroleum prices in order to enable the state-owned Nepal Oil Corporation (NOC), the sole distributor of petroleum in the country, to clear its dues to its Indian provider, the Indian Oil Corporation (IOC), the nepalnews online said today.

The IOC has often cut supplies to NOC due to non-payment of past dues. Many officials have expressed concern that the frequent oil crisis could hamper the smooth conduct of the key constituent assembly elections on November 22 to frame a new constitution and decide the fate of the 238-year old monarchy.

The NOC has urged the government to provide it with NRs 200 crore to ensure smooth supply till the elections.