Fuel trade via pipeline

Editorial

South Asia's first cross border petroleum pipeline linking Motihari in India and Amlekhgunj in Nepal is set to operationalise from next month. According to Nepal Oil Corporation (NOC), petroleum pipeline has been completed. The Indian Oil Corporation is set to provide training to 25 technicians from Nepal to make them capable to functionalise the first cross border petroleum pipeline of South Asia. Out of the total length of the pipeline, around 36 kilometres lie within the Indian territory, while the remaining 42 kilometres lie in Nepal.

The pipeline is jointly constructed by the Government of India and Nepal. The NOC is making the expenses over the construction of the pipeline on behalf of Nepal Government. In addition, the Indian government has invested Rs 3.5 billion to install the pipeline. Prime Minister Narendra Modi and Nepal Prime Minister KP Sharma Oli jointly laid the foundation stone for the project at the Hyderabad House in New Delhi during Oli's visit to India in 2018. The Nepal and Indian governments had signed the agreement over the construction of the pipeline on August 24, 2015, in Kathmandu in the presence of Indian Petroleum Minister Dharmendra Pradhan.

Although the initial cost of the project was estimated to be Rs 275 crore, where the Indian government would inject Rs 200 crore, the NOC said total project cost escalated to almost Rs 325 crore due to the delay. The project will start commercial operation by August, the Indian embassy officials said. The NOC also said the two governments are working to ensure that the inauguration of the project.

As the project has been completed and is awaiting its formal inauguration, Nepal will officially start fuel trade with India via the pipeline after Prime Minister K P Sharma Oli and his Indian counterpart Modi formally launch operation of the project. Though the date for the official inauguration of the project is yet to be fixed, the Ministry of Foreign Affairs and Nepal Oil Corporation confirmed that groundwork is underway to virtually inaugurate the project by the two prime ministers.

The virtual inauguration of the project will be done via video conference, where the two prime ministers will press a button in New Delhi and Amlekhgunj, resulting in the opening of the valve of the petroleum pipeline, the NOC said.

As a landlocked nation, Nepal imports all of its petroleum supplies from India, through which roughly 300 fuel trucks enter the country on a normal day.

The pipeline will be a boon for the country, not only in reducing transportation costs and eliminating the hassles of hiring tanker trucks but also running operation during strikes that often hamper petroleum imports through the Indian border.

Fuel adulteration is a major problem in Nepal and has been growing at an alarming rate. The Nepal Bureau of Standards and Metrology reports showed that the diesel sold in the valley was heavily adulterated. A number of reports have shown that most of the fuel adulteration cases occur on the Amlekhgunj-Raxaul route.

The pipeline will pump petrol and kerosene only after a year following the construction of vertical tanks to store them in Amlekhgunj. Similarly, for two years period, the Indian Oil Corporation will be pumping fuel to Nepal through its depot in Patna as it has been constructing a new oil terminal at Motihari in Bihar to supply fuel to Nepal through the pipeline.

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