Nepali Times
Still Nepal Oil Corruption

There was a sabotage scare at the airport two weeks ago. The army crew refuelling a helicopter that was to ferry Prime Minister Sher Bahadur Deuba discovered unidentified floating objects in the aviation fuel. A swift examination revealed that the sludge had resulted from a ruptured valve in the storage tank. The problem was corrected immediately because the army crew showed the sample to their VVIP passenger.

But such speed and efficiency is a lot more uncommon in matters concerning adulterated fuel at the Nepal Oil Corporation (NOC), which has the dubious distinction of being one of Nepal's most corrupt public sector undertakings with fuel adulteration kickbacks up and down the line.

When government last week announced that it was setting up a task force to recommend improvements at the NOC, there seemed to be hope that Nepalis might soon be able to buy unadulterated fuel. But those who thought the committee would also look into fuel adulteration and the corruption associated with it were mistaken. Sher Bahadur Pandey, head of the task force, told us his study was a way to respond to the changes taking place in the business of importing and selling fuel, and would make recommendations on making the NOC "more effective". He told us: "It will not be an investigation." Then why bother?

Just over a year ago, after a series of reports on fuel adulteration in the press (including "Nepal Oil Corruption", NT #19), the Ministry of Industry, Commerce and Supplies ordered a probe. And that was the end of that. The probe committee decided its fact-finding mission would consist of writing to some newspapers, asking for evidence of their reports. The committee also issued public notices calling on people to report adulteration. Meanwhile, during the middle of a state of national emergency, one of the most blatant and open forms of corruption in the kingdom goes on unabated.

The official reason the investigation fizzled out was there were no complaints. Some gas station owners had openly admitted that the only way to make a living retailing oil was by mixing subsidised kerosene with diesel and petrol. The gas station owner told us on record that the diesel-kerosene adulteration was 50-50.

The adulteration of fuels is said to cost Nepalis over Rs 1.2 billion in kickbacks paid to NOC staffers and politicians, and maintenance of vehicles that run on poor quality oils. Besides, there are the longer-term health and environmental impacts that are difficult to quantify. The mafia that is responsible for adulteration and corruption in the NOC are at large.

Some anti-corruption activists say the government should use its emergency powers and clean up the act. It is impossible to adulterate and get away with it unless you have friends at the NOC who test and certify your supplies.

(11 JAN 2013 - 17 JAN 2013)