Analysing Petroleum Price Hike and the strike

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The Nepal Oil Corporation (NOC) has jacked up fuel prices effective from Saturday afternoon. Diesel and kerosene prices have been hiked by Rs 1 per litre, while petrol has become dearer by Rs 2 per litre. As per the new rates, diesel/kerosene will cost Rs 100 per litre, while petrol will available for Rs 125 per litre. The price of aviation fuel sold to domestic airlines has been hiked by Rs 10 per litre to Rs 130 per litre, and that sold to international carriers has been increased by $50 per kilo litre to $1,300 per kilo litre.

With this revision, NOC’s monthly projected loss will come down to Rs 1 billion from Rs 1.15 billion. NOC dropped its plan to raise the price of LPG fearing possible political backlash, sources said. NOC faces Rs 733 million in monthly losses from its LPG business alone. On a LPG cylinder, NOC incurs Rs 523 loss.

Nepalese students protesting at fuel price rises set a parked bus on fire and vandalized other vehicles on Wednesday during a strike in the capital Kathmandu, leading police to make more than 60 arrests.
The city-wide strike, called by student unions to protest at an increase in the price of petrol, diesel, kerosene and aviation fuel last week, saw schools and colleges shut and most government vehicles stay off the roads. Some 2,000 police patrolled the streets, detaining protesters as they tried to enforce the strike by stopping vehicles.

A question just stroke to me. NOC’s monthly projected loss will come down to Rs 1 billion from Rs 1.15 billion. How is this covered? or How has this been covered? Of course, the loss is ultimately coming upon the head of government, as it owns NOC. How will the government cover the loss? The absolute answer is from the tax paid by country people and or loan, either of the way, it is covered by the sum of money that otherwise should have been sanctioned for the development projects. Thence, the loss is going to be covered from the payment of the fund collected from and for all Nepali people.

I do not know which group and with what motives, are the students calling for the strike. But its obvious, it tends to add the burden to all Nepali, by reducing a part of the burden of the consumers of the product. If the NOC gets loss, the loss is to be covered by the fund collected and should have been targeted all people. The consumers of the product may be in balance, but it is to rob the non-consumers. To summarise, the strike is called up to rob the non-consumers. Wouldn’t it be better that the cost of the product be beared by the consumer of the product. In my view, NOC should not make up the price to go for loss. The single penny of loss of the NOC is the direct loss of non-consumers and low-consumers of the product.

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