China confirms sending fuel to Nepal

China could well become a long-term fuel supplier to Nepal, undercutting IOC, which had been the sole supplier of fuel to Nepal for four decades.

October 30, 2015 02:04 am | Updated March 25, 2016 12:51 am IST

China on Thursday confirmed it was sending fuel supplies to Nepal, breaking India’s monopoly on the export of petroleum products to the Himalayan nation.

China’s Foreign Ministry spokesman Lu Kang said in his regular media briefing that in response to a request from the Nepali side, “the Chinese government decided to supply Nepal with a certain amount of emergency fuel assistance so as to help Nepal to tide over its fuel shortage”.

The spokesman also signalled that China could well become a long-term fuel supplier to Nepal, undercutting Indian Oil Corporation (IOC), which had been the sole supplier of fuel to Nepal for four decades. “A working group of Nepal also visited China. They had discussions with relevant authorities in China on the trade of oil products,” Mr. Lu said.

Analysts point out that India’s de facto embargo on oil supplies to Nepal, following the adoption of a new Constitution, in which the Indian origin Madhesis appeared poorly represented, had imparted fresh urgency in Kathmandu to seek China as an alternative energy supplier.

Highly placed sources in Nepal told The Hindu that the request to China for supplies was routed through Narayan Kaji Shrestha, the Vice-Chairman of the ruling UCPN (Maoist) during his visit, earlier this month, to Beijing where he attended a conference on the revival of the Silk Road.

On Wednesday, Nepal Oil Corporation (NOC) and China National United Oil Corporation (PetroChina) had signed an agreement on the supply of petroleum products to Nepal. The agreement is meant to ease short-term fuel shortages in Nepal. But The Kathmandu Post quoted NOC spokesperson Deepak Baral as saying: “A larger business-to-business agreement will be signed between the two state-owned oil companies within one-and-a-half month.”

Separately, China has also agreed to grant 1.2 million litres of fuel to Nepal to alleviate immediate energy shortfall. Local media reports in Nepal say that on Saturday, NOC would send 12 fuel tankers at the Kerung-Rasuwagadhi border point to receive Chinese fuel. Mr. Baral, the NOC spokesman, was quoted as saying the Chinese authorities would oversee issues related to insurance, transport and labour laws once the tankers enter the Chinese soil.

In a conversation with The Hindu , Santosh Ghimire, a Kathmandu-based journalist, pointed out that Nepal’s engagement with China on energy security should not be viewed as an anti-India move. On the contrary, “a new generation in Nepal is keen to establish a trilateral partnership with India and China as part of a more evenly balanced foreign policy”.

The fuel deal with Nepal feeds into China’s broader strategic perspective, with Kathmandu as one of the nodes of the Beijing-led Belt and Road connectivity initiative that would integrate the economies of Eurasia. Nepal and China have inked a four-point document endorsing the Belt and Road initiative.

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