NOC has proposed to increase total fuel storage capacity to 415,000 kilolitres from the existing 72,000 kilolitres at a total cost of Rs 28 billion within five years. The expansion will help NOC meet demand for three months.

The state-owned entity has briefed PM Dahal that it will implement its plan to expand fuel storage capacity very soon. NOC said that it will develop the storage facilities in the already identified places that were also mentioned in the budget, such as Khaireni of Tanahu, Battar of Nuwakot, and Panchkhal of Kavre. Fuel storage facilities will also be developed along the mid-hill highway to cater to the demand of vehicles plying the highway.

Considering the increasing demand of petroleum products in the Capital, NOC has planned to develop a storage facility with capacity to stock around 70,000 kilolitres of fuel in the Valley. In the long run it has plans to install a pipeline, which is going to be constructed from Raxaul to Amlekhgunj. “We can install the pipeline from Pathlaiya (Bara) to Kathmandu along the proposed fast track,” said NOC Managing Director Gopal Bahadur Khadka.

As per NOC, of the total Rs 28 billion, the cost to purchase land to build the storage facilities will hover around Rs seven billion and the remaining amount will be invested to install storage tanks.

NOC also has plans to develop storage facilities for liquefied petroleum gas (LPG), widely known as cooking gas. To cater to the demand for 45 days (around 47,500 tonnes based on existing demand), NOC will require an additional Rs 26 billion. NOC has proposed to develop LPG storage facilities in Dhanusha, Jhapa, Kavre and Nawalparasi districts.

However, to implement the projects to expand its storage facility, NOC sorely lacks an efficient institutional mechanism, including its staffers. NOC was instructed to increase its storage facility by the then government and parliamentary panels in the aftermath of the fuel crisis that the country had to face during the border blockade. However, nothing concrete has materialised till date.

After the recent supply disruptions of fuel, the Prime Minister had asked Minister for Supply Deepak Bohara to expedite the storage facility expansion plan to end the perennial crisis.

During the briefing to the prime minister, Minister Bohara requested that the land required for the expansion of Amlekhgunj depot be provided at the earliest through a Cabinet decision.

A few months back, NOC had requested the government through its parent ministry to provide 33.6 hectares of land for the expansion of the Amlekhgunj depot. Reengineering of the Amlekhgunj depot is one of the components of the Nepal-India petroleum pipeline project. To install the storage tank, as well as loading gantry, NOC has requested for land and the proposed land is covered by forest. NOC also sought right of way clearance for the installation of the pipeline.

The pipeline will be installed from Raxaul (India) to Amlekhgunj (Nepal) and its total length will be 37 kilometres as the detailed engineering of the pipeline has been completed recently. The pipeline is going to be constructed under grant aid worth INR two billion from Indian Oil Corporation. NOC too will invest INR 750 million for the reengineering of the Amlekhgunj depot.

The pipeline is expected to be completed within 30 months from the start of construction. The pipeline will be named Ram Janaki petroleum pipeline to represent the historical ties of Nepal and India. In the future, NOC has planned to expand pipeline to Bhandara of Chitwan and to Bhairahawa.

The Nepal-India petroleum pipeline is expected to save Rs 600 million in a year that NOC has been spending as transportation cost for fuel tankers. It will further save Rs 500 million that is being spent as fuel cost of tankers to ferry petroleum from India, as per NOC.