Nepal Oil Corporation Limited (NOC) नेपाल आयल निगम लिमिटेड

INTRODUCTION

is a state-owned trading enterprise of Nepal that imports, stores and distributes various petroleum products in the country.
established on January 10, 1970, by the Government of Nepal under the "Company Act, 2021 (1964)".
The government owns 98.36% of its share and rest is contributed by four other state-owned enterprises: Rastriya Beema Sansthan, National Trading Ltd., Nepal Bank Ltd., and Rastriya Banijya Bank.

Nepal, being one of the landlocked countries of South Asia, has to depend on India for the supply and distribution of various petroleum products as the eastern, southern and western part of the country is attached with India.
The prospect of crude oil exploration in Nepal has not yet been proven a feasible one, so the entire national demand is met by import alone.
From the very beginning of NOC's trading activities, a special and long-term supply arrangement has existed with Indian Oil Corporation Ltd. (IOC), a leading national oil company of India, having more than 55% of the market share.
NOC, headquartered in Kathmandu, has over the years expanded and now has

five regional offices, branch offices, fuel depots, and aviation fuel depots.
NOC is the sole organization responsible for the import and distribution of petroleum products through around 1500 Tank Trucks and 1500 retail outlets owned by the private sector around all parts of the country.
Nepal is becoming more dependent on petroleum products for meeting its energy requirement.
Petroleum products constitute about 15% of total energy consumed in Nepal.

IMPORT

The nearest seaport from Nepal is Haldia (Kolkata) which is about 900 km from the nearest Indo-Nepal border.
The long transportation distance from nearest seaport to Nepal is the main constraint for import of POL from the third country.
All the petroleum products consumed in Nepal are procured and imported from Government of India (GOI) undertaking national oil company, i.e. Indian Oil Corporation Ltd (IOC) under a 5 years' Contract Agreement signed on 27th April 2012.
NOC uplifts petroleum products as per its requirement from IOC's different refineries, terminals, and depots situated in the eastern and northern part of India.
The supply of LPG is arranged under a PDO (Product Delivery Order) system and IOC is providing Bulk LPG to Nepalese LPG industries from Haldia, Barauni, Mathura & Panipat refineries.
Meeting the ever-increasing demand for LPG in Nepal has always been a concern to NOC.
The transportation from IOC locations to NOC depots and to retail outlets is done by Tank Trucks.

FUTURE PROJECTS

To meet the increasing demand, an MOU between IOC and NOC for construction of cross-border Petroleum Product Pipeline from IOC's depot (Raxaul) to NOC's depot (Amlekhgunj ) has been signed.
The Detailed Feasibility Report (DFR) of the proposed pipeline has also been prepared and the construction/investment modalities are under discussion between the companies. Similarly, the scope of laying LPG pipeline across the Indo-Nepal border has also come in the discussion between the companies.

MANAGEMENT

The highest policy-making and controlling body of NOC is its Board of Directors.

The Board is represented by all the shareholders.

The Managing Director (MD) who is also member secretary of NOC Board has the overall responsibility for management and operations.

Currently, the Chief Executive Officer (CEO) of NOC is the Managing Director who has the overall responsibility for day-to-day operations besides the Member-Secretary of NOC Board.
the operations of NOC are coordinated under two broad categories of Marketing and Finance cum administration, each headed by Deputy Managing Director.

The pricing of major petroleum products like MS, HSD, SKO, and LPG needs approval from the Government of Nepal.

STORAGE FACILITIES

The increase in storage capacity over the years in line with the growth in the

demand of petroleum products is quite impressive.
The present storage capacity of 71,622 kiloliters is, however, just enough for 20 days national sales based on the projected sales for 2014.
To maintain the same level of storage facilities NOC has to constantly increase its storage facilities.
Therefore the NOC management is giving adequate attention to the expansion of storage facilities.
Currently, it is working towards developing storage facilities for petroleum products to meet the demand of at least 30 days.

Click here for the current storage locations in different regions of the country

QUALITY AWARENESS

The main areas of concern of NOC are fuel conservation, safety, quality and pollution control.
In the area of fuel conservation, consumers are more or less conversant with the idea and follow the guidelines contained therein.
In the area of safety measures all possible steps are being taken to educate the people related with petroleum business and in case of the depots of NOC and storage facilities of the retail dealers, it has been mandatory to follow the safety guidelines.
With the relatively recent realization of global warming, pollution and its resultant adverse effects on the health of the population, the major area of concern is fuel quality and pollution control.
The main area of concern from the perspective of the corporation is that, in spite of the level best efforts on the part of the corporation, a significant level of air pollution has been contributed by vehicular emissions.
To safeguard the health of the population, especially that of children, NOC has already made arrangements to supply the unleaded petrol in Nepal and has been controlling the adulteration by joining hands with other concerned government bodies and as well consumers forums.
With the help of IOC, NOC has been able to train employees in the field of quality and pollution control, stock loss control, fire and safety precautions during operation, engineering matters, as well as in the detection, control, and countermeasures against adulteration and required laboratory test procedures and methods.
Maintaining the same standard of petroleum products in every stage of operation and distribution is a prime concern of NOC.
To ensure the prime concern of NOC, and thereby control pollution, a separate Quality & Pollution Control Department has been set up.
Central laboratory is equipped with necessary facilities for testing of quality standards of petroleum products. Laboratory testing is regularly carried out and quality norms are strictly adhered .
NOC has arranged the inspection team to check adulteration and maintain the standard of petroleum products available in the market.

DISTRIBUTION NETWORK

Distribution and sale of ATF are solely done by the corporation as it requires very stringent quality control measures.
Sale of all other products are done by Petrol Pumps, Packed Dealers and Kerosene Dealers numbering approximately 2500 throughout the Nation.
Approximately 60% of all petroleum products are consumed in the Central Region alone.
The products are transported from IOC refineries, Terminal and Depots to the corresponding NOC Depots and retail dealers by tank trucks.
The number of transporters throughout the Nepal is 494 and the number of tank trucks so engaged is 1180.
To ensure quality of the products reaching the customers, in case of MS and HSD only, two samples of each products are drawn, one sample is kept safely at the dispatching location and the other one is in the custody of retail dealer and regular monitoring of the quality of the products are performed by means of surprise checks.
Such surprise checks are conducted by a committee comprising of the following representatives:

The representative from Governmental authorities.
The representative from Consumer Forum.
The representative from Dealer's Association.
NOC Representatives.

Any retail dealers found to be selling out substandard products are penalized as per the existing rules and regulations.

Supply Points
The region wise demand of NOC is met through the purchase of petroleum products from the IOC depots, Terminal and Refinery located near the border with Nepal.
For Eastern Region	Barauni Refinery
For Central Region	Raxual Depot
For Western Region	Betalpur Depot, Mugalsari Terminal
For Mid-Western Region	Allahabad Terminal, Gonda Depot
For Far Western Region	Banthara Depot