Fuel Overview

Nepal Oil Corporation Limited (NOC) is a monopoly state owned trading enterprise of Nepal that imports, stores and distributes various petroleum products in the country. In Nepal, no private or other companies are allowed to import petrol and diesel other than NOC. Being a landlocked country, all fuel products in Nepal are imported via India under the special agreement with Indian Oil Corporation (IOC). NOC, headquartered in Kathmandu, has over the years expanded and now has Seven Provincial offices in every State of Nepal, Three branch offices, two fuel depots, One Petrol Pump, and Ten aviation fuel depots, with total existing storage capacity of 71,674 kilolitres (kL), which is assessed to be enough for 20 days of national sales based on 2014 sales. NOC is employing 872 permanent staffs and other contract work force.

NOC distributes its petroleum products to various government affiliated and NOC approved privately owned companies to be distributed to consumers.  Currently, it is working towards developing storage facilities for petroleum products to meet the demand of at least 30 days. All aviation fuel (Jet A-1) is distributed and sold directly by NOC through seven Aviation Fuel Depots in order to adhere to stringent quality control measures.

Five months after the earthquake, Nepal experienced a blockade on its southern border with India which significantly impacted the fuel provisioning into the country. A daily average of 300 fuel trucks enter Nepal from India, however, during the blockade period approximately 5–10 fuel trucks entered Nepal causing a severe fuel crisis.

The current storage capacities of the Fuel depots of the country are as follows

Links to the authorized dealers and retailers:

Province 1 (http://noc.org.np/publicView/filess/30)

Province 2 (http://noc.org.np/publicView/filess/31)

Bagmati Province (http://noc.org.np/publicView/filess/32)

Gandaki Province (http://noc.org.np/publicView/filess/33)

Lumbini Province (http://noc.org.np/publicView/filess/34)

Karnali Province (http://noc.org.np/publicView/filess/35)

Sudurpaschim Province (http://noc.org.np/publicView/filess/36)

For more information on government and fuel provider contact details, please see the following links:  4.1 Government Contact List and 4.7 Fuel Providers Contact List.

Information may also be found at http://www.mytravelcost.com/petrol-prices/ which is updated monthly. 

Fuel Pricing

NOC has implemented Automatic Petroleum Pricing Mechanism (APPM) since 29^th September 2014. To cushion consumers against an oil price shock, the government has seeded a Price Stabilisation Fund with NRs500m (around US$5m) [2]. If petroleum product prices rise by more than 2%, the NOC will draw on the fund to moderate the increases passed on to consumers; if prices decrease by more than 2%, the NOC will make deposits into the fund to build it up against future negative shocks.

*Price applicable within 15KM of NOC depot/Sales Office. Selling Price of POL Products in NRs.Per Kilo Liter (Inclusive VAT) as of August 27, 2020 (http://noc.org.np/)

Exchange rate 1 USD: 119.44 NPR 

Seasonal Variations 

Fuel worth Rs. 214.48 billion (approx. 1.81 billion USD) was imported in the fiscal year 2018/19 [2]. Import of fuel has gradually increased for the last couple of years due to the increase in the consumption of fuel, as per a spokesman NOC. The ongoing reconstruction works in the country has also contributed to increasing fuel consumption. During monsoon, because of reasons like bad road condition due to continuous rain and due to lessened developmental activities, the import of fuel is lower.

Fuel Transportation

The Motihari-Amlekhgunj pipeline is a 69 kilometres (42.9 mi) long oil pipeline from Motihari, India to Amlekhgunj Depot in Parsa, Nepal. This pipeline makes transportation of oil across the border from India easier, safer and faster to Nepal. It is the first trans-national pipeline in the Indian sub-continent operated by Indian Oil Corporation Limited.

The pipeline was jointly inaugurated by Prime ministers of India and Nepal on 10 September 2019.

The products are transported from IOC refineries, Terminal, and depots to the corresponding NOC depots and retail dealers by tank trucks. There is a total of 494 transporters across the country and 1,893 tank trucks are available.

NOC does not have its own transportation provision. A bilateral contract with the transporter is the basis for all the product delivery orders to be sent out to Indian Oil Corporation (IOC) depots carried along by each oil tanker. From the IOC’s depots with respect to the capacity of the tankers, either 12 KL or 20 KL fuel is carried back to the respective depots after necessary clearance procedure at the customs. 

However, in several instances, fuel transporters are often the cause of supply bottlenecks. Fuel tankers, which are mainly private owned, are the only transporters of fuel in the country, hence, fuel tanker association strikes/protests often lead to halt in the supply of fuel resulting in a fuel crisis.

Link: Tank Truck detail of all province (http://noc.org.np/pages?id=28)

Standards, Quality, and Testing

With the help of IOC, NOC has been able to train employees in the field of quality and pollution control, stock loss control, fire and safety precautions during operations, engineering, as well as in the detection, control and countermeasures against adulteration and required laboratory test procedures and methods.

A Quality & Pollution Control Department at Babar Mahal, Kathmandu has been set up to constantly monitor fuel standards.  The central laboratory is equipped with necessary facilities for testing of quality standards of petroleum products. Laboratory testing is regularly carried out and quality norms are strictly enforced. NOC also frequently arranges for its inspection team to check adulteration and maintain the standard of petroleum products available in the market.

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Sources:

1. Nepal introduces a new oil pricing mechanism (http://country.eiu.com/article.aspx?articleid=1622363546&Country=Nepal&topic=Economy&subtopic=For_8%22%20%5Cl%20%22:~:text=On%20October%201st%20the%20Nepal,diesel%2C%20kerosene%20and%20aviation%20fuel.&text=The%20NOC%20will%20adjust%20fuel,)%2C%20the%20NOC%27s%20sole%20supplier.)
2. The Kathmandu Post (https://kathmandupost.com/money/2019/08/06/oil-import-bill-soared-25-percent-to-rs214-48-billion-in-last-fiscal)