A day after historic Nepal-China oil deal

A day after Nepal signed its first oil trade agreement with China, the Indian Oil Corporation (IOC) on Thursday increased the volume of petroleum products from four border points. On Thursday alone, 131 fuel tankers crossed into Nepal.

This could be the largest fuel consignment made to Nepal since India imposed an unofficial trade embargo on September 22. According to our district correspondents, 53 and 16 oil tankers entered via Jogbani and Kakadvitta border points in the eastern region respectively on Thursday. Likewise, 50 and 12 tankers entered through Nepalgunj and Kailali points in the West. Out of 108 tankers dispatched, the IOC refilled an additional 83 tankers on Thursday, the NOC said. Sixty-seven tankers received diesel, while nine have been loaded with petrol and seven with aviation turbine fuel. The NOC, however, said they had not been informed by the IOC on increasing the fuel quota. 

The government was forced to take an unprecedented move to appoint China as its second oil trading partner after the IOC curtailed fuel supply to Nepal by as much as 90 percent. “We have not received any official letter from IOC on the latest development. But supply seems to have improved,” said NOC Director Nagendra Sah. Meanwhile, IOC Chairman and Managing Director B Ashok has said that they will increase petroleum supplies to Nepal. “We have a four-decade-old agreement with Nepal. Supplies have come down in the past month as a few of the routes are blocked. 

We are continuing to supply to them and are hopeful of increasing supplies once the protests subside,” Ashok told Indian media on the sidelines of an oil industry conference in New Delhi on Thursday. Asked how big is the concern over loss of business volumes to China, Ashok said: “Let’s wait and watch.” Wednesday’s deal between the NOC and the China National United Oil Corporation (PetroChina) has paved the way for a larger business-to-business agreement, which would make China an additional long-term oil source for Nepal. The NOC has said that a modality would be prepared on the required quantity, transportation route, quality and pricing, before signing the business-to-business deal. Nepal could import 35-40 percent of its total fuel needs, it said. 

The country imported fuel worth Rs107.13 billion from the IOC in the last fiscal year. Due to extended power cuts and increase in development works, demand for petroleum products in Nepal has been growing by 10 percent annually.