Nepal, India Oil corporations sign MoU for supply of petroleum

Kathmandu, March 27

Government-run oil monopolies in India and Nepal have signed an MoU to trade petroleum products between the two companies for the next five years.

The agreement, which was signed by Nepal’s supplies Minister Deepak Bohara and Indian Oil Minister Dharmendra Pradhan, in New Delhi today, says Indian Oil will reduce its ‘cut’ on refined petroleum products to help ease prices in Nepal and will not object if Nepal imports oil from a third country. According to the deal, IOC will provide refinery services to NOC if it wants to import crude from a third country.

The IOC has agreed to cut its margin on the sale of petroleum by 0.5 percentage points from April 1. The figure now stands at 2 per cent. Similarly, the IOC will not charge interest on delayed payment of consignments. Until now, the NOC had to pay fines of up to 10 per cent even if it defaulted by a single day.

The IOC will also build a cooking gas storage facility near Birgunj to help reduce transport cost for Nepali entrepreneurs.

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