October 6, 2008

India to Supply Higher-Octane Fuel to Nepal

Text of report by privately-owned Nepalese eKantipur.com website on 6 October

[by Milan Mani Sharma]

Kathmandu, 6 October: Here is good news for automobile dealers and riders. Nepal Oil Corporation (NOC) is planning to introduce high-octane petrol in the market soon, which will give better mileage and ensure engine longevity compared to the existing gasoline.

"Indian Oil Corporation (IOC) [the monopoly supplier] has agreed to provide us 91-octane petrol for domestic marketing, and we wish to introduce it immediately after Tihar [festival, end of October]," said a senior NOC official. He told the [Kathmandu] Post that the new variety of petrol would be more expensive than the 88-octane petrol presently being sold by as much as 3 rupees per litre, but that it would give better mileage on the highway and also be better on the engine.

An understanding to supply high-octane petrol was reached during the business review meeting of NOC and IOC, which concluded in the capital today. "An agreement on its supply will be made soon," said the source.

NOC had long been asking IOC to supply it with high-octane fuel, especially as auto dealers here had been pushing for better gasoline.

In the absence of quality fuel, consumers were suffering higher maintenance and operational costs. Dealers were finding it difficult to convince manufacturers to launch advanced and better vehicle models in the Nepali market.

"Their problems will be over now," said the source, who added that NOC would continue distributing the present 88-octane petrol and also bring in the expensive 91-octane product.

The plan is to distribute it through selected dealers only. However, if demand should justify it and dealers prepare separate infrastructure, NOC could allow them to import the product directly.

Under the understanding the two petroleum companies reached today, IOC would be supplying 91-octane petrol from the Barauni refinery. And the mechanism of import would be similar to the import of liquefied petroleum gas - that is, NOC would issue a purchase delivery order (PDO) to the dealer and on this basis IOC would supply the product.

In the beginning, the corporation plans to introduce the product in the Kathmandu Valley only. "We expect that some 200 kilolitres of 91-octane petrol will be consumed in the valley per month," said the source. The corporation will gradually expand distribution outside the valley.

Moreover, the IOC team led by its marketing director G. C. Daga has also agreed to provide human resource development training to NOC staff. The training will be imparted at different IOC refineries and mainly cover quality control and ethanol mixture in petrol.

The IOC team also met with Supplies Minister Rajendra Mahato and the secretary today and discussed ways the bilateral pipeline project could be implemented.

During the meeting, the IOC officials reaffirmed their commitment to regularise the supply of fuel to Nepal. They also raised concern over NOC's ill financial health and poor payment record.

Mahato and the supplies secretary also requested IOC to help NOC restore normal supplies and also raise the quota of LP gas being supplied to Nepal.

"The IOC team has responded positively to these requests," said the source.

Originally published by eKantipur.com website, Kathmandu, in English 6 Oct 08.

(c) 2008 BBC Monitoring South Asia. Provided by ProQuest LLC. All rights Reserved.