IndianOil to supply 1 mt fuel to Nepal for 5 years

State-owned Indian Oil Corp (IOC) on Monday signed an agreement to supply about 1 million tonnes of fuel annually to Nepal for the next five years.

IOC Chairman B Ashok said IOC will supply 1.3 million tonnes of petroleum products to Nepal every year under the pact.

India started supply of fuel and LPG to Nepal Oil Corp in 1974 when the first supply Agreement was signed. Thereafter, the agreement was renewed periodically.

The current pact is valid up to this month end.

"The supply agreement signed today is for the period April 2017 to March 2022 and will meet the full requirements/ demand and quantities of all the major oil products (petrol, diesel, kerosene, ATF and LPG)," Ashok said.

IOC will supply Euro-IV grade petrol and diesel to Nepal from next month. While presently the fuel is sent by trucks, a pipeline will be laid from Patna-Motihari-Amlekganj for supply of fuel in future.

This pipeline will get fuel from IOC's Barauni refinery in Bihar as well as Haldia refinery in West Bengal.

"Every 5 years, we renew fuel supply agreement with Nepal. Today, IOC and Nepal Oil Corporation signed agreement for supplying fuels for the next 5 years," Oil Minister Dharmendra Pradhan said at the MoU signing.

The new Memorandum of Understanding, he said, is "much better" than the previous ones as "it keeps the interests of both the nations".

He however did not elaborate.

"We feel it is the responsibility of India to help Nepal meet its energy requirements, especially after Prime Minister Narendra Modi's visit to Nepal in 2014 where in his address to Nepal parliament took responsibility of the Raxaul-Amlekhganj petroleum product pipeline," he said.

Stating that formalities for laying th pipeline is almost complete, he said work on the pipeline should begin in 2017- 18.

"Nepal wants to take that pipeline little forward to near Kathmandu which is about 70 kms more and has sought technical help from IOC, though the expenses will be incurred by Nepal," he said.

Pradhan said a high level official committee has been formed to look into preparing feasibility of the pipeline as well as another LPG pipeline from Motihari to Nepal's Amlekhganj.

It would also study feasibility of extending the natural gas pipeline that will reach Gorakhpour to Nepal to provide the Himalyan nation clean fuel for producing electricity and industrial use.