NEW DELHI – State-owned Indian Oil Corporation has agreed to supply refined products to Nepal for the next five years to meet all the fuel needs of the landlocked Himalayan nation, officials said on Monday.
India has supplied all Nepal’s fuel needs since 1974 and is keen to maintain close trading ties with its neighbour in South Asia, an area where regional rival China has sought to expand its influence.
Indian Oil Corp, the nation’s biggest refiner, would supply 1.3 million tonnes a year of refined fuels to Nepal, the company’s chairman B Ashok told a news conference in New Delhi.
“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, including petrol, diesel, kerosene, aviation turbine fuel 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. According to IOC officials, the pipeline will get fuel from IOC’s Barauni refinery in Bihar as well as Haldia refinery in West Bengal.
As well as refined products, India was discussing plans to supply gas to Nepal, oil minister Dharmendra Pradhan said at the same news conference.
The minister said the two nations were considering building a refined products pipeline linking Motihari in India’s eastern state of Bihar to Amlekhgunj in Nepal.
He did not give details of the pipeline plan.
“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,” the minister said.
Pradhan 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.
New Delhi has used its surplus refining and power generation capabilities to deepen ties with nations such as Sri Lanka, Bhutan, Bangladesh and Myanmar, as well as Nepal.
China wants to include Nepal in its flagship “One Belt, One Road” initiative to link Asia with Europe, the Middle East and Africa.
