Historic oil agreement of Nepal with China

Kathmandu October  29- Nepal signed a historic oil trade deal with China on Wednesday, ending a four-decade supply monopoly of the Indian Oil Corporation (IOC). A memorandum of understanding (MoU) was signed between the Nepal Oil Corporation (NOC) and China National United Oil Corporation (PetroChina) in Beijing to supply petroleum products to Nepal. Finally, Nepal has the second oil trade partner. Nepal can bring any amount of fuel as per our needs when required from the north. A larger business-to-business agreement will be signed between the two state-owned oil companies within one and a half month. As the country’s fragile economy continues to reel under severe fuel shortage due to an “unofficial trade embargo” imposed by India, the government took an unprecedented move to appoint its second oil trading partner.

 

Wednesday’s agreement provides the framework for the imports of petroleum products from China to break the cycle of short-term fuel crisis in Nepal. In a separate deal on Wednesday, China also agreed to immediately supply 1.2 million litres of fuel to Nepal on grant. Subsequently, there would be a larger commercial oil trade deal between the two countries, which would make China an additional long-term oil source,  a modality would be prepared on the required quantity, transportation route, quality and pricing, before signing the business-to-business deal.