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Nepal-China Sign Deal for Fuel Import
Oct 31, 2015

Ending four decades of Nepal’s dependence on India for petroleum products supply, Nepal and China sealed a framework deal to import petroleum products from the northern neighbour.

  • A MoU was signed between Nepal Oil Corporation (NOC) and China National United Oil Corporation (Petro China), a state owned company, regarding supply of petroleum products from China to Nepal in Beijing.

  • It is a framework agreement for import of petroleum products from China.

  • This agreement has paved the way for commercial import of petroleum products to Nepal.

  • Nepal said that a formal door has been opened to import at least one-third of the fuels required by the country from China.

  • The two sides are yet to finalise pricing details and timeline for the supply of fuels to be brought from China and efforts are under way to make it possible to buy Chinese fuels within the next three to four weeks, by completing all procedures.

  • China told to Nepal delegation that they will try to fix a price close to the current market rate in Nepal despite the geographical difficulties of ferrying it via the Tibet route and also the fact that the standard of fuel will be of higher quality than the fuel provided by India.

  • A separate contract was also signed between Nepal and China in Beijing for the speedy delivery of 1,000 metric tonnes petroleum grant, which China has provided to Nepal as relief from the current shortage. The grant will be ferried to Nepal via the Kyirong border point.

Nepal is currently reeling under acute shortage of petroleum products after Madhes-based parties intensified their agitation in the wake of the promulgation of the new constitution on September 20 and obstructed the Nepal-India border.

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