New Delhi: State-run Indian Oil Corp (IOC) on Monday signed an agreement to supply over 1 million tonnes (MT) of petroleum products annually to Nepal for the next five years, Chairman B. Ashok said.
"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, including petrol, diesel, kerosene, aviation turbine fuel and LPG," Ashok told reporters here.
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. According to IOC officials, the 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 (Monday), IOC and Nepal Oil Corporation signed agreement for supplying fuels for the next 5 years," Petroleum Minister Dharmendra Pradhan said at the MoU signing event.
The new MoU, 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.
Pradhan 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.
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.
India has been a traditional supplier of fuel to Nepal, which receives its entire demand of about 200,000 kilolitres of fuel every month by road from IOC.