An 11-member parliamentary committee formed to recommend measures to reform Nepal Oil Corporation (NOC) is considering recommending waiver of taxes, including value added tax (VAT), levied on liquefied petroleum gas (LPG).
The panel also discussed in its meeting last Wednesday issues like involving the private sector in petroleum trade, construction of Nepal-India cross-border oil pipeline, reforms in NOC’s management and reducing interest rates on loans that NOC takes from state-owned financial institutions.
The committee will submit a report to the government with necessary recommendations to streamline Nepal’s oil trade, including reforms to NOC. It will meet again this week.
Lawmaker Rabindra Adhikari, one of the members of the committee, said they discussed waiver of taxes on LPG as an immediate measure to cut NOC’s ballooning losses and maintain sufficient cash flow to finance petroleum imports. “The initiative will cut around Rs 330 million monthly losses of NOC,” he said.
Lawmaker Usha Gurung said as many countries do not impose taxes on LPG as it is considered a basic household necessity, the panel has been discussing if such a measure would be reasonable.
The government collects Rs 251.91 on a LPG cylinder in VAT and custom duty. The cash-strapped NOC incurs Rs 1.03 billion monthly losses in its LPG business. It does not impose tax on kerosene.
NOC has been adopting cross-subsidy measures to cut its losses. For example, it enjoys Rs 212 million monthly profits on petrol, Rs 304.7 million on aviation fuel sold to international carriers, Rs 108.9 million on aviation fuel sold to domestic carriers, and Rs 28.1 million on kerosene.
Remaining
The panel also discussed in its meeting last Wednesday issues like involving the private sector in petroleum trade, construction of Nepal-India cross-border oil pipeline, reforms in NOC’s management and reducing interest rates on loans that NOC takes from state-owned financial institutions.
The committee will submit a report to the government with necessary recommendations to streamline Nepal’s oil trade, including reforms to NOC. It will meet again this week.
Lawmaker Rabindra Adhikari, one of the members of the committee, said they discussed waiver of taxes on LPG as an immediate measure to cut NOC’s ballooning losses and maintain sufficient cash flow to finance petroleum imports. “The initiative will cut around Rs 330 million monthly losses of NOC,” he said.
Lawmaker Usha Gurung said as many countries do not impose taxes on LPG as it is considered a basic household necessity, the panel has been discussing if such a measure would be reasonable.
The government collects Rs 251.91 on a LPG cylinder in VAT and custom duty. The cash-strapped NOC incurs Rs 1.03 billion monthly losses in its LPG business. It does not impose tax on kerosene.
NOC has been adopting cross-subsidy measures to cut its losses. For example, it enjoys Rs 212 million monthly profits on petrol, Rs 304.7 million on aviation fuel sold to international carriers, Rs 108.9 million on aviation fuel sold to domestic carriers, and Rs 28.1 million on kerosene.
Remaining
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