New Delhi: State-run Indian Oil Corp (IOC) on Monday inked the renewed agreement with Nepal Oil Corporation (NOC) to one million tons of petroleum products annually to Nepal for the next five years.
The statement issued by the Ministry of Petroleum and Natural Gas post the deal said, “The renewed agreement is an umbrella document between the two parties which apart from detailing the supply of petroleum, oil and lubricant products and also puts in place an institutional mechanism for cooperation in the areas of additional services and technical assistance between the two.”
Nepal has been receiving fuel from Indian since 1974 under contracts that were periodically renewed. The renewed deal is for the period April 2017 to March 2022 and covers petrol, diesel, kerosene, jet fuel and LPG.
As part of the agreement, IOC will also help lay pipeline to supply the required fuel to Nepal. At present, road the only way Nepal gets its fuel supply and a political unrest near to the border or a road trouble can create issues with uninterrupted supplies, leading to acute energy shortage in the landlocked country. A pipeline can help overcome this issue.
This deal has come in the wake of the China’s continuous moves to include Nepal in its flagship ‘One Belt, One Road’ initiative to link Asia with Europe, the Middle East and Africa. Also, Nepal had signed a commercial deal with China last year to reduce its dependency on India for its fuel requirements. Until 2015, India was the sole fuel supplier to the 30 million people of Nepal.
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