Download With over Rs. 100 billion (USD 1.049billion 1)

With over Rs. 100 billion (USD 1.049billion1) worth of imports per year, petroleum products are the biggest imports of Nepal.100 percent of petro‐products in Nepal comes from outside the country. Yet, the trade of petroleum products is completely on the hands of a single organization – the government owned Nepal Oil Corporation (NOC). The sole importer of petroleum products in Nepal, Nepal Oil Corporation (NOC) operates without any Act governing itself and for the most part, sets the rules of its own game. The sheer volume of its transactions and the absence of any governing legal principle make NOC prone to excessive politicization and corruption. Current financial health of NOC, lack of accountability towards taxpayers and lack of economic soundness of its policies and operations render consumers extremely vulnerable. This paper looksinto the costs that have been imposed upon the consumers due to existent petroleum trade regime in Nepal’s petroleum industry. Against limitations such as lack of access to sufficient relevant data and time constraints, the paper tries to substantiate its claims via some rudimentary calculations.It then lays down a set of recommendations that if implemented, can take the burden off the taxpayers, smoothen petroleum product supply in the country and allow market forces to act freely in a market‐and‐private‐sector friendly business environment. 1
06.15.2014 NRB exchange rate (buying) 95.32