To counter China in Nepal, India plays cooking gas diplomacy game; 5 key points

By: | Updated: March 28, 2017 10:55 AM

India is seeking to attain the status of global superpower under the leadership of Prime Minister Narendra Modi.

India is seeking to attain the status of global superpower under the leadership of Prime Minister Narendra Modi. (Reuters image)

India is seeking to attain the status of global superpower under the leadership of Prime Minister Narendra Modi. China is already an financial powerhouse. When you have countries like these two geographically positioned as neighbours then other nations in the region tend to benefit from both of them. Nepal is managing to achieve exactly that. India’s state-owned Indian Oil Corp (IOC) had signed an agreement to supply about 1 million tonnes of fuel annually to Nepal for the next five years. This came after Nepal hinted that it will source its cooking gas from China instead of India, according to The Indian Express report. Notably, India has been catering to Nepal’s domestic demands for petro products since 1974.

1. IOC Chairman B Ashok said IOC will supply 1.3 million tonnes of petroleum products to Nepal every year under the pact. India started supply of fuel and LPG to Nepal Oil Corp in 1974 when the first supply Agreement was signed. Thereafter, the agreement was renewed periodically. The current pact is valid up to this month end. “The supply agreement signed today is for the period April 2017 to March 2022 and will meet the full requirements/demand and quantities of all the major oil products (petrol, diesel, kerosene, ATF and LPG),” Ashok said. IOC will supply Euro-IV grade petrol and diesel to Nepal from next month. While presently the fuel is sent by trucks, a pipeline will be laid from Patna-Motihari-Amlekganj for supply of fuel in future.

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2. This pipeline will get fuel from IOC’s Barauni refinery in Bihar as well as Haldia refinery in West Bengal. “Every 5 years, we renew fuel supply agreement with Nepal. Today, IOC and Nepal Oil Corporation signed agreement for supplying fuels for the next 5 years,” Oil Minister Dharmendra Pradhan said at the MoU signing.

3. The new Memorandum of Understanding, he said, is “much better” than the previous ones as “it keeps the interests of both the nations”. He however did not elaborate. “We feel it is the responsibility of India to help Nepal meet its energy requirements, especially after Prime Minister Narendra Modi’s visit to Nepal in 2014 where in his address to Nepal parliament took responsibility of the Raxaul-Amlekhganj petroleum product pipeline,” he said.

4. Stating that formalities for laying th pipeline is almost complete, he said work on the pipeline should begin in 2017-18. “Nepal wants to take that pipeline little forward to near Kathmandu which is about 70 kms more and has sought technical help from IOC, though the expenses will be incurred by Nepal,” he said.

5. Pradhan said a high level official committee has been formed to look into preparing feasibility of the pipeline as well as another LPG pipeline from Motihari to Nepal’s Amlekhganj. It would also study feasibility of extending the natural gas pipeline that will reach Gorakhpour to Nepal to provide the Himalyan nation clean fuel for producing electricity and industrial use.

The panel would also explore possibilities of forming a joint venture between Nepal Oil and IOC for creating marketing infrastructure in Nepal. “It will create retail infrastructure in Nepal and create storage for petrol, diesel, LPG, ATF in remote areas,” he added.

(With agency inputs)

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