Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Amid criticism that the Nepal Oil Corporation (NOC) is increasing fuel price unnaturally, Surendra Kumar Paudel, the entity’s managing director clarified that neither NOC nor the government has role in fuel price determination.
Citing that the rise in crude oil price and dollar in recent time has made fuel price dearer, Paudel said that recent revisions in price of petroleum products is natural.
“Basically, three cost factors, rate of dollar, price of crude oil and administrative cost of NOC, impacts price of petroleum products. While rate of dollar and crude oil price has increased notably today compared to their rate few months before, administrative cos of NOC has not played a role in recent fuel price revision process,” said Paudel.
As per him, rise in value of dollar by one percentage points will impact fuel price by three times while rise in price of crude oil by one dollar will impact fuel price by one time only. “It should be understood that rise in rate of dollar has higher impact in fuel price compared to rise in price of crude oil. US dollar today is constant at around Rs 116 while crude oil which was traded at $50 during lockdown has increased to $70 per barrel,” informed Paudel.
Similarly, Paudel also said price of petroleum products is constant in the last two years. “While price of petrol and diesel two years before was Rs 112 per liter and 102 per liter respectively, petrol and diesel today costs Rs 114 per litre and 99 per liter. Thus, it is injustice to say that fuel price has increased unnaturally in the domestic market,” he said.
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