KATHMANDU, May 14: The government on Friday formed a four-member committee under Chief Secretary Madhav Prasad Ghimire to steer and monitor reforms in Nepal Oil Corporation (NOC).
The committee has secretaries from Home Ministry, Prime Minister´s Office and Commerce and Supplies Ministry as members.
It has been asked to implement immediate, short, medium and long-term reforms in NOC, which is infamous for corruption and leakage, as suggested by the NOC Reforms Commission.
The commission had found leakage and corruption in corporation running at Rs 3.44 billion a year, something which has been costing consumers dearly.
As that amount is pocketed by corrupt officials, the commission had asked the government to hold NOC managing director, chairman and Minister for Commerce and Supplies responsible for the leakage and take appropriate actions against them.
Interestingly, secretary of Ministry of Commerce and Supplies, Purushottam Ojha -- a member of the newly formed implementation team, is himself the chairman of NOC. The commission has sought investigation against Ojha for his possible involvement in corruption.
“Clearly, we do not expect Ojha to initiate probe against himself. The government must remove him from the team. Otherwise, the report simply will not be implemented,” said Jyoti Baniya, a member of the commission.
In order to plug leakage, the commission has asked the government to instantly re-structure the NOC. Under this, it has suggested that the government designate the vice-chairman of the National Planning Commission as chairman of NOC and appoint a chief executive through free competition. It has also pushed the government to enact law governing the petroleum sector, set up a Nepal Petroleum Authority as a regulatory body and adopt an automatic pricing mechanism.
The commission has pushed strongly for opening petroleum imports to the private sector, arguing that it was necessary to end NOC´s monopoly and make it more accountable to consumers.
Moreover, the commission has also urged the government to hold talks with India to waive off price adjustment factor (PAF) adopted in setting export price for Nepal. As PAF is equivalent to customs duty and taxes (imposed on crude import), the commission views passing the cost to Nepali consumers is an unjustifiable act.
It has also suggested that the government reclaim the PAF paid so far to Indian Oil Corporation (IOC) -- the sole supplier of fuel to Nepal. “Such amount stand at around Rs 14 billion, almost enough to free NOC of its debt burden,” according to the report.
The commission has also pushed for transparent mechanism for appointment of dealers and transporters. It has called for scientific fixation of technical loss like shrinkage, as it has been imposing unwanted financial burden of some Rs 5.04 billion a year on consumers.
Among others, it has also asked the government to strictly monitor the operations of liquefied petroleum gas (LPG) market, particularly as bottlers have been supplying substandard cylinders to consumers, exposing them to grave risk.