The Nepali government on Monday decided to provide a loan of NRs 7 billion to the country’s state-run oil company to pay the Indian Oil Corporation (IOC) part of the dues it owes to it and ensure smooth supply of petroleum products in the Himalayan nation.
A meeting of the Council of Ministers on July 15 decided to provide the amount to Nepal Oil Corporation (NOC), the state-owned petroleum importer and supplier, to pay the Indian Oil Corporation (IOC) the dues it owes to the IOC due to the adjustment in price of petroleum products.
NOC is set to pay around NRs 17 billion to Indian Oil Corporation to reduce the outstanding dues of NRs 31 billion, a senior official at the corporation told media persons.
According to the NOC, it currently has outstanding dues of NRs 31 billion to be paid to the IOC.
“NOC is making a payment of INR 10.5 billion equivalent to NRs 16.8 billion to the IOC on Monday,” according to Nagendra Sah, deputy managing director of the corporation.
“After this payment, NOC’s dues to the IOC will be reduced to NRs 14 billion.”
The state-owned oil monopoly was failing to make full payment of supplied oil for the past few months due to rising international prices of petroleum products and its failure to adjust the prices at home accordingly amid fears of public protest.
The Cabinet on July 15 decided to provide NRs 7 billion in the form of loans of investment. “We have to repay the loans to the government in the next five years with a 5% interest rate,” said Sah.
“NOC also received loans amounting to NRs 3 billion from Rastriya Banijya Bank, a government owned commercial bank,” informed Sah.
