Short supply fuels oil crisis in Nepal

KATHMANDU: The fuel crisis in Nepal intensified on Saturday as Indian Oil Corporation (IOC), the main supplier of petroleum products to the Himalayan nation, cut supplies due to non-payment of outstanding bills.

The shortage of petroleum products in Nepal aggravated as IOC cut fuel supplies by 67 per cent to the Himalayan state. The decision to cut the supply was made after state-run Nepal Oil Corporation (NOC) failed to make payments of committed amount to IOC, official sources said.

Nepal has no oil reserves of its own and depends on its giant neighbour India for its needs.

"We have requested IOC to make additional supply, promising to pay more once the banks here start issuing fresh loans, but IOC has not responded yet," said Digambar Jha, chief of NOC.

Nepal's oil imports have gone down to 1,000 KL per day over the past one week as compared to the national daily requirement of 3,000 KL a day.

NOC is suffering heavy losses as it has been subsidising petroleum products to consumers in the impoverished nation. The NOC has only paid NRs 100 crore to three commercial banks to clear its old dues.

Even after increasing the price of diesel and petrol by about 25 per cent the NOC is operating in heavy loss.