Following a long negotiation, Nepal has agreed to import all petroleum products from India while Nepal and India have also renewed their fuel sale deal for another five years.
Following threats by Nepal to source its cooking gas from China thereby undermining India’s exclusivity since 1974, New Delhi rushed in to placate its neighbor by promising to meet its entire domestic demand for petro products.
India will also assist in implementing a cooking gas for poor scheme akin to Prime Minister Narendra Modi’s Ujjwala scheme in India, besides building storage facilities for the Nepalese.
As per the agreement signed by Indian Oil Corporation and Nepal Oil Corporation in the presence of oil minister Dharmendra Pradhan and Nepal’s minister for supplies Deepak Bohara, the Indian company will supply about 1.3 million tonnes of fuel every year for the next five years.
India has been supplying fuel to Nepal since 1974 under contracts that were periodically renewed. The renewed deal will cover petrol, diesel, kerosene, jet fuel and liquefied petroleum gas (LPG). Besides, in keeping with Modi’s promise in 2014 in an address to the Nepal Parliament, India has renewed its commitment to build the Raxaul-Amlekhganj petroleum product pipeline, for which work is expected to start in 2017-18.
Renewing the agreement with India, Nepal gave up an agreement signed with China for fuel purchase.