Private companies can start their own petroleum business after two years

Ending Nepal Oil Corporation's monopoly in petroleum trading, the government has issued permanent license to 11 private companies which allows them to do petroleum business in Nepal. The government recently issued such license to 10 companies. Malika Petroleum Pvt Ltd had received license for petroleum trading last year. These companies can begin petroleum trading like Nepal Oil Corporation (NOC) if they become successful to develop necessary infrastructure within two years. Petrolimex, National Petroleum, Trans Himalayan Corporation, Sonapur Mineral Oil and Birat Petroleum, among others, recently acquired permanent license from the government. According to Gokul Dhital, director general of Department of Supply and Consumer Welfare Protection (DoSCWP), these companies will have to submit another proposal to DoSCWP after building necessary infrastructures. A technical committee formed by the department will study the infrastructure and determine whether or not they are capable of doing petroleum trading. “Companies that develop all specified infrastructures and meet other standards set by the government will be allowed to enter the petroleum market,” added Dhital. Among others, the companies should have storage capacity of 20,000 kiloliters and fuel pumps of their own. Similarly, quality of petroleum products imported by them should meet the standards specified by the government. NOC officials said “it won't be easy for the private sector to enter the petroleum market. These firms might have showed interest after seeing NOC making huge profit over last two years but it is not easy to develop infrastructure specified by the government.”