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Domestic oil industries on the verge of collapse
PARSA, APR 27 -
Domestic oil industries here are on the verge of collapse as their products have failed to compete with those smuggled in from India. For the last four years, Indian edible oils are being smuggled in but the government has never bothered to control the smuggling.
According to local traders, if the trend continues for another two years many Nepali oil industries would have to shut down as they will find no market for their products. Already, Indian edible oils like Rani, Diamond, Dhara (Indian) brands have captured the market in many border towns and rural areas of Nepal.
They claimed that the customers were buying lower standard Indian oils at comparatively cheaper prices.
Satish Agrawal, manager of Shivashakti Oil Industry, said that Indian oil was cheaper compared to Nepali oil as the smugglers don't have to pay customs duty either to India or Nepal on the illegally brought in oil. He said it has become very tough for Nepali oil to compete in the market as customers are more interested in buying Indian oil because of its low price even though it is sub-standard.
The price of Nepali oil is higher compared to Indian brands as the industries here have to pay VAT, customs tax and income tax to the government while importing mustard for the production of oil. This is why the finished product costs more than Indian brands.
According to Agrawal, there are seven oil industries in Parsa and all of them are in a pathetic condition. The industries operate hardly 15 days a month and are producing only 50 percent of their total capacity. There are around 150 to 200 workers in each industry and the management of the factories has been providing full salary to all the workers.
Agrawal said that if the government does not control the illegal import of oil soon, of investment of the banks worth billions of rupees would be lost and so would the employment opportunity of over 1,500 workers. According to Birgunj Customs Office, Nepal imported 13,856 kg of mustard oil worth Rs. 1.44 million during the first half of the current fiscal year through the Birgunj Customs.
Posted on: 2010-04-28 07:52
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