The ministry is currently in the process of forming a team comprising officials of the Supplies Ministry, Nepal Oil Corporation (NOC) and the Department of Supply Management. This team will conduct feasibility studies on establishment of at least one petroleum storage facility in each of the 75 districts in the country.

“The joint team would be formed soon. It will carry out field studies and submit reports to the government within mid-December,” Supplies Ministry Spokesperson Surya Prasad Shrestha said.

As per the government estimates, Rs42 billion will be required to build petroleum storage units in all 75 districts.

In the initial phase, the government is considering using idle land owned by state-owned enterprises, such as National Trading Limited and Salt Trading Limited, to build the storage facilities. “The government will acquire private land in other places,” Shrestha said.

The decision to establish fuel storage facilities across the country is part of the government’s plan to maintain stock of petroleum products to meet the country’s demand of at least three months.

The government had come up with this plan after the country faced acute shortage of petroleum products following over four-and-a-half-month trade embargo imposed by India from September 2015 till February of this year.

Currently, NOC, the sole supplier of petroleum products in Nepal, has storage facilities at 10 locations. These storage plants can keep stock of 71,622 kl of petrol, diesel, kerosene and aviation fuel. The quantity is sufficient to meet the country’s demand of only 20 days.

Earlier, the government had decided to set up storage facilities in Paanchkhal of Kavrepalanchowk, Khairanitar of Tanahu and Battar/Betrawati of Nuwakot. The government, through the budget of this fiscal year, had said construction of these storage plants would begin within this fiscal year after completing the land acquisition process and preparing detailed project proposals.

The government, through the budget, had also said feasibility study on construction of a 10,000-tonne liquefied petroleum gas storage facility in Kavrepalanchowk would be conducted within this fiscal year.

Earlier, Nepal had sought Chinese assistance to build storage facilities in Panchkhal of Kavre, Trishuli of Nuwakot and Khaireni of Tanahun districts for storage of up to 42,000 kl of different petroleum products.