Tuesday , September 25 2018
Home / Articles / Nepali economy / Don’t allow NOC to pocket more profit

Don’t allow NOC to pocket more profit

By Prajwal Shrestha
Just recently, the Nepal Oil Corporation (NOC), saying that the Indian Oil Corporation (IOC) hiked the price of petro-products, has increased the price of the petro-products in the Nepali market. When different consumers group blamed the NOC, in the name of automatic adjustment of price, NOC has increased the price at a time when the price of the petro-products in the international market has declined. Later, when a Parliamentarian committee gave order to the NOC to sell petro-products in previous price, NOC said that as petro-products’ price in the Indian market is high compared to the Nepali market, petro-products were smuggled to the Indian market, therefore, NOC cannot reduce the price. This justification is totally unacceptable as the government duty is to curb smuggling and if the government organs cannot curb smuggling, one should understand that the government has failed. With the fear of smuggling, we are compelled to pay more for the petro-products. If NOC, a government undertaking, takes much profit, it is an act of punishment as any private firm is found taking much profit will be punished by the government. Anyway, NOC should not pocket much profit. According to the international standard a private firm can keep 10 percent as a profit, which should be applied in the of NOC  as well.  Already, the consumers are paying VAT on the petro-products. Besides that, the consumers are also paying Rs 5 per liter of petro-products as infrastructural tax. Again, NOC is collecting another 5 rupees as tax for undisclosed title. The consumers have not opposed from paying infrastructural tax as they believe that the tax amount is going to be spent in construction of Budhi Gandaki hydropower project. So , consumers believe that such tax should be utilized for the development projects. If the fund is utilized properly, we believe, Nepal can construct huge hydropower projects by our own investment. Therefore, this is taken as a good beginning, still consumer’s doubt on proper utilization of the tax they have paid to the government. The government has decided to construct Kathmandu-Nijgadh fast track project by itself. If the government will be able to utilize infrastructure tax, the consumers are ready to pay more tax for construction of the Kathmandu-Nijgadh fast track project. If the NOC is not going to reduce the petro-products’ price, NOC should not enjoy additional profit at any cost, but the additional profit should be used for construction of the fast-track project. The government should make public collection of such fund every month. For example, how much money has been collected in the infrastructural tax, nobody knows. If the government maintains non-transparency, it will lose credibility. Therefore, the government should inform such things to the public. Furthermore, instead of collecting additional tax, the government should try to develop mechanism of converting such taxes as public share from which consumers will feel ownership in such infrastructural projects. If we can do so then we can construct some other infrastructural projects by local investment alone. We should not seek foreign money while doing so. Maybe, the government feels difficulty in distributing shares, however, if introduced the mechanism of providing shares on the basis of producing petro-products purchase receipt, there will be no difficulty in collecting money from the consumers for big infrastructural projects. Similarly, the government can levy extra amount on passenger buses, goods carrying transportations, aircrafts to generate fund for such infrastructural projects. We know, the government, with the decision of constructing the fast track project by itself has formed a special taskforce to study on the modality of construction. Fund management is vital component to complete this project. One among the ways to manage fund for the fast track project can be distributing shares to the consumers of the petro-products. We know, there is urgency for construction of another international airport in Nijgadh along with construction of the fast track project as the only international airport, Tribhuwan International Airport, has already become congested and to explore the tourism industry, we need another international airport within two to three years. If we go for foreign grant or aid or loan to complete these two projects, it will take a long time. Therefore, if the government is committed to construct these two projects, it should introduce fast track modality of managing fund to complete these two projects.

Check Also

India and postal roads

By Prajwal Shrestha According to a report in Nagarik vernacular daily, due to the Indians, …