User:CA Badal Kumar Gurung

Badal Kumar Gurung is a Chartered Accountant from Institute of Chartered Accountants of India. He is the co-founder of WWW.enrollmyexperience.com and the President of Businessolution.in. Currently he is working as the Finance Controller in Mount Meru Group of Companies. Mount Meru group is one of the largest business groups with a pan Tanzanian presence and a vision to be positioned as one of the largest corporate houses in East and central Africa. Established in 1978, the group has grown from a small trading enterprise to a leading player in Petroleum Products, Edible Oil and Logistics. The Company's main line of business has been importation and distribution of petroleum products and branded cooking oil to its customers. Group activities are located in Tanzania, Kenya, Uganda, Zambia, Malawi and Rwanda.

= Fuel Nepal = Nepal is a landlocked country in South Asia with the population of 30 million. Nepal is bordered by China to the north and India to the south, east, and west. It is separated from Bangladesh by a narrow Indian corridor and from Bhutan by the Indian state of Sikkim. Nepal is located in the Himalayas and is home to eight of the world's ten tallest mountains, including Mount Everest, the highest point on Earth. Its southern Madhesh region is fertile and humid.[11] The country has an area of 147,181 square kilometres (56,827 sq mi), making it the world's 93rd largest country by area.[12] It is also the 41st most populous country.

Economy of Nepal
Agriculture remains Nepal's principal economic activity, employing about 65% of the population and providing 31.7% of GDP. Only about 20% of the total area is cultivable; another 40.7% is forested(i.e.covered by shurbs, pastureland & forest); most of the rest is mountainous. Rice and wheat are the main food crops. The lowland Terai region produces an agricultural surplus, part of which supplies the food-deficient hill areas.

Fuel Supply
As compared to the first eight months of fiscal year 2013/14, supply of petrol has increased by 14.0 percent, diesel by 16.1 percent, aviation fuel by 9.1 percent and LP Gas by 9.8 percent in the corresponding period of the current fiscal year 2014/15. In the same period, however, supply of kerosene has decreased by 0.2 percent. So has its demand 52 owing to the fact that LP Gas has been substituting kerosene.

Diesel, Kerosene, Petrol and Aviation Fuel has occupied major portion in petroleum products consumption volume. Shares of diesel, kerosene, petrol, and aviation fuel excluding LP gas in FY 2013/14 stood at 54.55 percent, 1.42 percent, 17.98 percent, and 9.22 percent respectively. Observation of the consumption ratio of first eight months of the current fiscal year 2014/15 shows shares of diesel, kerosene, petrol, and aviation fuel as 67.53 percent, 13.10 percent, 0.86 percent, and 6.70 percent respectively.

Import of Fuel and Problem faced
The fuel import on 2010-11, 2011-12, 2012-13 and 2013-14 was 20%, 19%, 18% and 19% of total Import. As one of the major import of Nepal is fuel. Every year it is increasing rapidly.

The problem is that Nepal import the fuel only from Indian Oil Corporation, India. As a sole supplier, it has affected the pricing. At the very beginning the agreement was made for importing & for the price, the Nepal had the right to bargain but later on these years Nepal is getting the fuel at the price determined by India. Even in international market if the fuel price reduces, Nepal is getting no benefit from it.

Further, due to protests the borders are blocked and Nepal suffers the huge crisis for the fuel affecting the Industries, public and ultimate economy of Nepal.

Fuel Solution
Nepal should allow privatization for Petroleum Products. Any private company should be allowed to purchase the fuel from any country & using transport to bring in Nepal. The east African countries has adopted the same system. Mostly all the east African countries import the fuel from Tanzania. The big companies consider the requirements of all the small & medium companies and order the vessel mainly from Dubai. Once the vessel arrives at Tanzania, each company sent their transporter to uplift their product. The government is controlling the price. They have fixed the price of fuel for ultimate consumer and all companies are bound to sell at same price.

In the similar way, Nepal should allow the privatization. The government should control the price and let the private sector bring the fuel in country. For this the Nepal government should do the following initiation:
 * 1) Construction of depots where private companies can keep their fuel as reservoir.
 * 2) Calculating the cost of fuel import & allowing the genuine margin, fix the price for the ultimate consumer.
 * 3) Making agreements with the countries from where the fuels are to be imported.
 * 4) Giving subsidy, tax holidays, grants to the company initiating the same.