on
Supply Chain Management of Nepal Oil Corporation
Submitted by:
Rabi Ranjan Patel
Birgunj Public College
PU Regd. No.
Submitted to:
Office of the Dean, Faculty of Management
Purbanchal University, Biratnagar
Birgunj,Nepal
December, 2016
DECLARATION
I Rabi Ranjan Patel declare that this thesis entitled Supply Chain Management of Nepal Oil
Corporation submitted in partial fulfillment of the MBA Degree, the Faculty of Management,
Purbanchal University is my original work carried out under the guidance of Dr. Uttam Regmi,
and has not been submitted anywhere for the award of any other degree or commercial purpose.
acknowledgements have been made wherever the findings of others have been cited.
PU Reg.No:
ACKNOWLEDGEMENTS
guidance, encouragement and creative suggestions, this seminar paper would have been
incomplete. Despite the scarce time available to him, he was always there to guide me.
At this opportunity, I cannot forget to pay honor to Mr. Binay Shrestha and Dr. Deepak
Shakya and all my teachers and staffs of Birgunj Public College whose worthy cooperation and
inspirations made me qualified for holding Masters Degree and dare undertake this dissertation.
I apologize for any errors in this seminar paper ize for any errors in this seminar paper.
Thank you.
Birgunj, Nepal
ABBREVIATIONS
KL Kiloliters
Nepal, a land locked country, does not produce any oil and depends totally on imports in the
refined form. Nepal Oil Corporation is the sole organization responsible for the import and
distribution of petroleum products. This study is all about supply chain management of Nepal
Oil Corporation.
The study mechanism adopted in this study in order to find the supply chain management of
Nepal Oil Corporation includes the surfing from internet and obtaining required information
about Nepal Oil Corporation (NOC) Ltd. in terms of its upstream suppliers and downstream
distributors.
Nepal depends on India for the supply and distribution of various petroleum products as the
eastern, southern and western part of the country is attached with India. NOC's trading activities
is related with a special and long-term supply arrangement with Indian Oil Corporation Ltd.
It can be concluded from the observation and analysis which shows the supply chain
management of Nepal Oil Corporation that it is very necessary for the appropriate policy to be
adopted in order to ascertain smooth flow and distribution of petroleum products in different
It is recommended to Nepal Oil Corporation that to maintain the required level of storage
facilities it has to constantly increase its storage facilities and it is necessary to understand and
analyze the distribution channel of Nepal Oil Corporation so that it could fulfill demand of
petroleum products in coming years.
Chapter I
INTRODUCTION
This chapter deals with background information of Nepal Oil Corporation Limited
A least developed country landlocked between China and India, Nepal finds it difficult to access
international markets for the export and import of goods and services. Since the country does not
have crude oil sources to meet a rapidly growing national demand for petroleum products, it
depends on India for the supply of petroleum products. In 1974, Nepal signed a Memorandum
of Understanding (MOU) on Petroleum Supply with India, which has since governed the import
The present study, Supply Chain Management of Nepal Oil Corporation (NOC) Ltd., is
(NOC) Ltd. NOC deals with major petroleum products like MS, HSD, SKO, ATF and
LPG.
Nepal Oil Corporation (NOC) was established in January 1970 by the Government of
Nepal as a state-owned trading company to deal with the import, transportation, storage
and distribution of various petroleum products in the country. NC headquarter is in
Kathmandu, has five regional offices and also branch offices, fuel depots and aviation
fuel depots with total storage capacity of 71,622 kiloliters (KL) and around 600
employees.
supply- chain management is to provide maximum customer service atthe lowest cost
possible. A customer is anyone who uses the output of a process. Therefore,the customers
chain may include internal divisions of the company as well as external suppliers that
provide input to a focal company .A supplier for this company has its own set of suppliers that
provide input(also called second tier suppliers). Supply chains are essentially a series of linked
downstream in order to serve its customers. Usually, materials, information, capital, labor,
technology, financial assets and other resources flow through the supply-chain.
Since the goal of the firm is to maximize profits, the firm must maximize benefits and
minimize costs along the supply-chain. The firm must weigh the benefits versus the costs
Information Management
Supply chain planning
Logistic Management
Procurement
Assets Management
supply chain is efficient and cost-effective. A supply chain is the collection of steps that a
company takes to transform raw components into the final product. The following are
1. Plan
2. Develop (Source)
3. Make
4. Deliver
5. Return
1. Plan
The first stage in supply chain management is known as plan. A plan or strategy must be
developed to address how a given good or service will meet the needs of the customers.
A significant portion of the strategy should focus on planning a profitable supply chain
management. This is the strategic portion of SCM. Companies need a strategy for
managing all the resources that go toward meeting customer demand for their product or
service. A big piece of SCM planning is developing a set of metrics to monitor the supply
chain so that it is efficient, costs less and delivers high quality and value to customers.
2. Develop (Source)
Develop is the next stage in supply chain management. It involves building a strong
relationship with suppliers of the raw materials needed in making the product the company
delivers. This phase involves not only identifying reliable suppliers but also planning methods
for shipping, delivery, and payment.Companies must choose suppliers to deliver the goods and
services they need to create their product. Therefore, supply chain managers must develop a set
of pricing, delivery and payment processes with suppliers and create metrics for monitoring and
improving the relationships. And then, SCM managers can put together processes for
managing their goods and services inventory, including receiving and verifying shipments,
3. Make
At the third stage, make, the product is manufactured, tested, packaged, and scheduled for
delivery. This is the manufacturing step. Supply chain managers schedule the activities necessary
for production, testing, packaging and preparation for delivery. This is the most metric-intensive
portion of the supply chain - one where companies are able to measure quality levels, production
4. Deliver
Then, at the logistics phase, customer orders are received and delivery of the goods is planned.
This fourth stage of supply chain management stage is aptly named deliver.This is the part that
many SCM insiders refer to as logistics, where companies coordinate the receipt of orders from
customers, develop a network of warehouses, pick carriers to get products to customers and set
5. Return
The final stage of supply chain management is called return. As the name suggests, during this
stage, customers may return defective products. The company will also address customer
questions in this stage.This can be a problematic part of the supply chain for many companies.
Supply chain planners have to create a responsive and flexible network for receiving defective
and excess products back from their customers and supporting customers who have problems
Thus, to ensure that the supply chain is operating as efficient as possible and generating the
highest level of customer satisfaction at the lowest cost, companies have adopted Supply Chain
A supply chain is a set of three or more entities directly involved in the upstream and
customer.
1. Inventory management
With a supply chain package, companies can significantly improve the way they track and
manage their supplies of raw materials and components needed for production, finished goods to
satisfy open sales orders, and spare parts required for field service and support. This eliminates
excess and waste, frees up valuable real estate for other important purposes, and minimizes
2. Order management
Supply chain can dramatically accelerate the execution of the entire order-to-delivery cycle by
helping companies to more productively generate and track sales orders. Supply chain also
enables the dynamic scheduling of supplier deliveries to more effectively meet demand, and
3. Procurement
All activities and tasks associated with sourcing, purchasing, and payables can be fully
automated and streamlined across a companys entire supplier network with a supply chain
software package. As a result, businesses can build stronger relationships with vendors, better
assess and manage their performance, and improve negotiations to leverage volume or bulk
As companies expand globally, their supply chains become more and more complex. This makes
the coordination of the numerous warehouses and transportation channels involved quite a
challenging endeavor without supply chain software in place. With supply chain, businesses can
improve on-time delivery performance and boost customer satisfaction by achieving complete
visibility into how finished goods are stored and distributed, regardless of the number of
With supply chain, organizations can more accurately anticipate customer demand, and plan their
procurement and production processes accordingly. As a result, they can avoid unnecessary
purchases of raw-materials, eliminate manufacturing over-runs, and prevent the need to store
excess finished goods, or slash prices to move products off of warehouse shelves. Therefore
Tibet/China,does not produce any oil and depends totally on imports in the refined form.
NOC is the sole organization responsible for the import and distribution of petroleum products.
Nepal Oil Corporation ( NOC) Ltd. was established in 26thPoush 2027 B.S. under the
Companies Act, 2021, with the main objective of assuring smooth and uninterrupted distribution
of petroleum products. After few years of establishment, Nepal Oil Corporation was granted
monopoly to import and distribute petroleum products. Before establishment of NOC, various
foreign enterprises like Esso, Vermasale, and Indian Oil International were fulfilling the needs of
petroleum products.
The government owns majority of its share i.e. 98.36% and four enterprises Nepal Bank
Trading Ltd(0.78%), have also invested in NOC. NOC was established with authorized and
issued capital of Rs.1 crore and paid-up capital of Rs 10 lakhs. At present authorized and issued
capital is Rs.50 crores and paid-up capital is Rs. 9,67,15,000. NOC deals
with the trading business of various types of fuel like MS, HSD, SKO, ATF, FO, LPG, etc. It
brings fuel from a third country. All these different types of fuel are sold and distributed all over
the country. It has five Regional Offices, branch offices, fuel depots and aviation fuel depots for
distribution of the fuel from the Eastern region to the Western region in Nepal. It has total
storage capacity of 72,088 KL and around 753 employees. As NOC has no storage facility of
LDO, FO and LPG, it sells these petroleum products as per the import. For LPG, NOC has
private dealer firms that import and sell it with the prior permission from NOC.
Nepal Oil Corporation Limited (NOC))is a state owned trading enterprise of Nepal that
imports, stores and distributes various petroleum products in the country. It was
established on 1970 by the Government of Nepal under the "Company Act, 2021
(1964)". The government owns 98.36% of its share and rest is contributed by four other
In the very beginning, the trading activities of NOC were started by storing two products
in two drums under the leadership of the late Mr. SubarnaBikramThapa appointed by
Government of Nepal. His persistent endeavor to develop NOC resulted in more than
development regions of Nepal. Nepal, being one of the land locked countries of south
Asia, has to depend on India for the supply and distribution of various petroleum
products as the eastern, southern and western part of the country is attached with India.
The prospect of crude oil exploration in Nepal has not yet been proven a feasible one, so
the entire national demand is met by import alone. From the very beginning of NOC's
trading activities, a special and long-term supply arrangement has existed with Indian Oil
Corporation Ltd. (IOC), a leading national oil company of India, having more than 55%
NOC, headquartered in Kathmandu, has over the years expanded and now has five
regional offices, branch offices, fuel depots, and aviation fuel depots, with total existing
storage capacity of 71,622 kiloliters (KL) and employing 508 permanent and other
contract work force. The highest policy making and controlling body of NOC is its
Nepal is becoming more dependent on petroleum products for meeting its energy
requirement. The demand of products like MS, HSD, SKO, ATF and LPG is about 1.2
million ton (MT per annum with annual increase by around 10%. Petroleum products
constitute about 15% of total energy consumed in Nepal. The nearest sea port from Nepal
isHaldia (Kolkata) which is about 900 km from nearest Indo-Nepal border. The long
transportation distance from nearest sea port to Nepal is the man constraint for import of
POL from third country. All the petroleum products consumed in Nepal are procured and
imported from Government of India (GOI) undertaking national oil company, i.e. Indian Oil
Corporation(IOC) under a 5 years contract agreement signed on 27th April 2012. NOC uplifts
petroleum products as per its requirements from IOCs different refineries, terminals and depots
situated in northern and eastern part of India. The supply of LPG is arranged under a PDO
(Product Delivery Order) system and IOC is providing bulk LPG to Nepalese LPG industries
fromHaldia, Barauni, Mathura &Panipat refineries. Meeting the ever increasing demand of
LPG in Nepal has always been a concern to NOC. The transportation from IOC locations to
NOC depots and to retail outlets is done by tank trucks. To meet the increasing demand, a
MOU between IOC and NOC for construction of cross border petroleum product pipeline from
IOCS depot (Raxaul) to NOCS depot (Amlekhgunj) has been signed. The detailed feasibility
report (DFR) of the proposed pipeline has also been prepared and the construction/investment
modalities are under discussion between the companies. Similarly, the scope of laying LPG
pipeline across Indo-Nepal border has also come in the discussion between the companies.
Currently the Chief Executive Officer (CEO) of NOC is the Managing Director who has
the overall responsibility for day-to-day operations besides the Member- Secretary of
NOC Board. Basically, the operations of NOC are coordinated under two broad
Managing Director.
N e p a l O i l C o r p o r a t i o n L i m i t e d
t y p G o v e r n m e n t o w n e d
e
I n d u s t r y P e t r o l e u m
F o u n d e d J a n u a r y 1 0 , 1 9 7 0
A r e a s e r v e d
Nepal
Number of employees 6 0 0 ( 2 0 1 6 )
W e b s i t e N e p a l O i l . c o m . n p
1.1.6 Objectives of NOC:
1. To import different types of petroleum and its products like petrol, diesel, Mobil,
lubricants oil, kerosene, grease, aviation oil from different countries;
2. To provide the technological service for the determination of required place and the
construction of tanks to fulfill the objectives as stated in (1);
3. To establish refining industry for refining and processing of imported crude oil from
different countries on its own or in collaboration with foreign companies;
4. To establish a firm to investigate the possibility of mining, refining and processing of oil
and gas mines in Nepal;
6. To manage own tanks or private tanks for distribution and sales of petroleum products in
Nepal; and,
As mentioned above, NOC was established with the main objective of assuring smooth
and uninterrupted distribution of petroleum products.
This section of the seminar paper reviews past and current literature on the supply chain
management of Nepal Oil Corporation Limited. It starts by discussing the industry trends,
dynamics, and characteristics in general. It proceeds to describe the structure of the upstream
and downstream supply chain of Nepal Oil Corporation Limited.
Oil has been used since early human history to keep fire ablaze but its usage has evolved over
the years through innovative ways of using it as a source of energy .Lee H.L et a1 (1993) has
the view that the concept of a supply-chain is about managing coordinated information and
material flows, plant operations, and logistics through a common set of principles, strategies,
policies, and performance metrics throughout its developmental life cycle. This provides
flexibility and agility in responding to consumer demand shifts at minimum cost. The
fundamental premise of this philosophy is synchronization among multiple autonomous
entities represented in it. That is, improved coordination within and between various supply-
chain members.
The Council of Supply Chain Management Professionals (CSCMP, 2011) defines supply chain
management in the following way:
Supply chain management encompasses the planning and management of all activities involved
in sourcing and procurement, conversion, and all logistics management activities. Importantly, it
also includes coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third party service providers, and customers. In essence, supply chain
management integrates supply and demand management within and across companies.
The definitions of supply chain management have been considered from literature in operations
management, marketing, product design, finance, and information technology. The definitions
have given knowledge on how these processes are integrated within and outside the company to
provide a cohesive and costs-effective advantage against the competition (Mentzer, DeWitt,
Keebler,Min&, 2001).
CSCMP (2011) implies that supply chain management is successful when the goal of getting
the right product to the right customer at the lowest costs is achieved. This is a situation that
will give the highest level of service to the customer and higher competitive advantage to the
company. Therefore, supply chain management touches on the mixture of different supply
chain activities to help maximize a companys profit and total value.
He states that NOC imports petroleum products from IOC, practically on credit. It is supposed to
make the payments in two installments within the next 30 days. Since NOC controls prices of its
products and cannot charge market prices, it has to cross subsidize its products. The combined
profits from all other products still fall short of loss made on LPG by hundreds of rupees per
cylinder. As a result, NOC fails to recover its investment made in the import of products from
IOC.
Thus, in the context of Nepal Oil Corporation, it is found that distribution and sale of petroleum
products is done by Nepal Oil Corporation, petrol pumps, packed dealers and kerosene dealers
and it requires very stringent quality control measures. The products are transported from IOC
refineries, terminal and depots to the corresponding NOC depots and retail dealers by tank
trucks. Thus, to maintain the required level of storage facilities Nepal Oil Corporation has to
1. Study Design
2. Sources of information
3. Presentation and analysis
4. Technique
1. Study Design
Study design is a plan of investigation for the collection and analysis of data. It helps to
move in the right direction in order to achieve the goal.
Thus, the study design shown in the above figure is less descriptive but more prescriptive
because the secondary data have been mainly used for analysis.
2. Sources of information:
The methods of collecting data and information are primary and secondary. They are:
1. Primary Data:
Personal Observation
Informal talk
Interview with employee
2. Secondary Data
Annual reports of NOC
Newspapers, magazines and journals
Websites of NOC
4. Techniques
There are several tools and techniques which are used for conducting this study which
can be explained with the help of the following figure.
Thus, the figure shows the research tools which includes the methods and techniques used for
analyzing the data and information conveniently.
As very research has its own limitations, this study is not biased. Therefore, this study
This study is related to only supply chain management of Nepal Oil Corporation
Limited and it does not cover all the aspects of NOC.
In the study, the distribution aspect has been followed with the NOC's viewpoint.
The opinions, attitudes and recommendations of all the dealers and the consumers
could not be ascertained. Hence, a selected few was taken into consideration,
which is another limitation of the study.
Lack of proper literature review and studies about the distribution aspect of NOC
was a major limitation for the study.
1. Introduction
Chapter one deals with the background of the study, this chapter starts with background
of the study shedding lights on supply chain management ofNepal Oil Corporation
Limited. Followed by meaning ofsupply chain management, introduction to the NOC and
its objective, objectives of the study, review of literatures, study methodology and
limitations of the study.
Observation and Analysis is the second chapter of the study where data collected are
presented and analyzed in a logical manner. It contains description of supply chain
management of NOC, and analysis of storage capacity of NOC, import and sales of NOC,
LPG sales and LPG upliftment .
Chapter II
information from various sources. In the course of analysis, the data gathered from the various
I, t O e r C m r ie n f ia n l e r a i ne sd N OC Pp ue tm r o p l s a n d
d e p o ts d e p d e a le r s o f
o ts N e p a l
Fig4.1 Distribution Network of NOC
Distribution and sale of ATF is solely done by the corporation as it requires very stringent
quality control measures. Sale of other products are done by Petrol Pumps, Packed dealers and
Kerosene dealers numbering approximately 2500 throughout the nation. Approximately 60% of
The products are transported from IOC refineries, terminal and depots to the corresponding NOC
depots and retail dealers by tank trucks. The number of transporters throughout the Nepal is 494
To ensure the quality of the products reaching the customers, in case of MS and HSD only, two
samples of each products are drawn, ne sample is kept safely at the dispatching location and the
other one is in the custody of retail dealer and regular monitoring of the quality of the products
are performed by means of surprise checks. Such surprise checks are conducted by committee
NOC Representatives
underground or underwater Crude oil and natural gas and fields, drilling exploratory wells, and
subsequently drilling and operating the wells that recover and bring the crude oil and/or raw
The downstream sector commonly refers to the refining of petroleum crude oil and
the processing and purifying of raw natural gas, as well as the marketing and distribution
of products derived from crude oil and natural gas. The downstream sector touches consumers
through products such as gasoline or petrol, kerosene, jet fuel, diesel oil, heating oil, fuel,
oils, lubricants, waxes, asphalt, natural gas, and liquefied petroleum gas (LPG) as well as
hundreds of petrochemicals.
In the context of NOC, there is no specific national policy in Nepal to govern petroleum
downstream business, i.e., transactions and marketing of petroleum products. The government
enacted Petroleum Act 1983, but it merely deals with upstream business such as exploration,
mining and distribution of crude oil from oil wells. As far as petroleum transaction is concerned,
it is carried out as per the regulations and internal decisions of NOC. NOC regulation has
established the corporation as the import monopolist, stockist and supplier of fuel in the domestic
market. It has authorized NOC to function as the regulatory body of the petroleum sector;
empowered it with the authority to appoint dealers for retail sales; hire transporters for the
transportation of fuel; set operating conditions and standards for dealers and transporters;
formulate quality regulation; control quality; and monitor and intervene in the market as and
when necessary.
Retailing of petroleum products is executed through the appointment of private sector dealers.
NOC appoints the dealers. It sets the terms and conditions for such appointments as per the NOC
regulation and does not allow dealers to deviate from its set operating guidelines.
There are different NOC-authorized dealers that operate petrol and diesel refilling stations across
the country. In addition, there are several kerosene dealers. NOC mobilizes this network of
dealers to supply petroleum products in the country.
However, since 17 February 2006, the dealers have had to collect the supplies themselves, make
all the necessary logistical arrangements for bringing the products to their premises and run the
retail-level business on their own. All petroleum dealers function under a syndicate of the Nepal
Petroleum Dealers Association (NPDA). There is also an association of kerosene dealers known
as the Nepal Kerosene Dealers Association (NKDA).
Any retail dealers found to be selling out substandard products are penalized as per the existing
rules and the region wise demand of NOC is met through the purchase of petroleum products
from the IOC depots, Terminal and Refinery located near the border with Nepal.
F o r E a s t e r n R e g i o n B a r a u n i R e f i n e r y
F o r C e n t r a l R e g i o n R a x u a l D e p o t
petroleum products is quite impressive. To maintain the required level of storage facilities NOC
has to constantly increase its storage facilities. Therefore the NOC management is giving
adequate attention to the expansion of storage facilities. Currently, it is working towards
developing storage facilities for petroleum products to meet the demand in Nepalese market.
The current storage capacities in different regions of the country are as follows:
l P e t r o l D i e s e l Kerosene J e t A l T o t a l
o
K a t h m a n d u 1 , 8 7 0 8 , 4 0 0 4 , 9 6 0 7 , 7 1 0 2 2 , 9 4 0
A m l e k h g u n j 1 , 9 3 0 1 5 , 7 0 0 5 , 6 0 0 0 2 3 , 6 4 0
B i r a t n a g a r 5 6 0 8 , 9 1 0 2 , 1 7 0 2 8 0 1 1 , 5 3 0
J a n a k p u r 3 0 1 4 0 7 0 0 2 4 0
B h a i r a w a 1 4 0 3 , 0 5 5 3 9 4 5 6 3 , 6 4 9
P o k h a r a 3 5 0 2 , 2 8 0 7 6 0 6 4 3 , 4 5 4
N e p a l g u n j 2 1 0 2 , 2 8 0 7 6 0 2 8 0 3 , 4 6 0
S u r k h e t 0 0 4 5 6 0 1 0 5
D h a n g a d i 8 5 1 , 5 9 0 8 3 0 4 5 2 , 4 8 0
D i p a y a l 0 3 0 3 0 0 6 0
T o t a l 5 , 1 3 5 4 1 , 6 1 0 1 6 , 3 1 4 8 , 4 9 9 7 1 , 6 2 2
S.N. F i s c a l Y e a r P e t ro l D i e s e l Kerosene Aviation Turbine Fuel Light Diesel Oil Furnace Oil LPG IN MT Mineral Turpe
Gas Industries Total Quota for August BARAUNI H A L D I A MATHURA KARNAL Total No.of Cylinder Upl
PARAJULI & BROTHERS GAS Industries Ltd. 378.00 88.480 1 7 8 . 1 9 4 266.674 18779.18 70
NOC imports petroleum products from IOC, practically on credit. It is supposed to make the
payments in two installments. Sine, NOC controls prices of its products and cannot charge
market prices, it has to cross subsidize its products. The combined profits from all other products
still fall short of loss made on LPG by hundreds of rupees per cylinder.As a result, NOC fails to
recover its investment made in the import of products from IOC. ButIOC will not sell anything
to NOC, unless its dues are cleared. So, NOC approaches the governments for loans. With
government guarantee, it somewhat gets loans to clear IOC dues from institutions like
Employees Provident Fund (EPF) and Citizens Investment Trust( CIT),apart from government
of Nepal and some commercial banks in the country. These are taxpayers money (mostly in
form of saving, some as taxes paid to government). IOC dues are then cleared with this money.
But the same business cycle continues, year in and year out. NOC continues to make losses and
continues to acquire taxpayers money as loans. Amidst all of this, the loans acquired via CIT
and EPF have never been paid. Interest are however paid duly by adding the interest payment
The figure shows the quantity of petrol imported in kiloliter by Nepal from the year
2050/051 to 2070/071. It can be clearly observed that the quantity of petrol imported has
The above figure shows the quantity of diesel imported in kiloliter by Nepal from the year
2050/051 to 2070/071. As the demand of diesel is rapidly increasing in the Nepalese market
The above figure shows the quantity of LPG imported in metric ton by Nepal from the year
2050/051 to 2070/071. Nepal Oil Corporation heavily relies on the import of LPG and its import
The major findings that can be viewed from this study are as follows:
1. Nepal depends on India for the supply and distribution of various petroleum
products as the eastern, southern and western part of the country is attached with
India.
2. The prospect of crude oil exploration in Nepal has not yet been proven a feasible
4. NOC hasfiveregional offices, branch offices, fuel depots, and aviation fuel
5. NOC deals with the trading business of various types of fuel like MS, HSD, SKO,
ATF, FO, LPG, etc.
6. The supply of LPG is arranged under a PDO (Product Delivery Order) system and
IOC is providing bulk LPG to Nepalese LPG industries from Haldia, Barauni,
7. The products are transported from IOC refineries, terminal and depots to the
8. To meet the increasing demand, a MOU between IOC and NOC for construction
of cross border petroleum product pipeline from IOCS depot (Raxaul) to NOCS
9. Any retail dealers found to be selling out substandard products are penalized as
per the existing rules and the region wise demand of NOC is met through the
purchase of petroleum products from the IOC depots, Terminal and Refinery
located near the border with Nepal.
10. NOC is working towards developing storage facilities for petroleum products to
3.2 Conclusions
It can be concluded from the observation and analysis which shows the supply chain
management of Nepal Oil Corporation. Similarly, it also shows the requirements that are needed
for effective supply chain management. In fact, it is very necessary for the appropriate policy to
be adopted in order to ascertain smooth flow and distribution of petroleum products in different
products is done by Nepal Oil Corporation,petrol pumps, packed dealers and kerosene dealers
and it requires very stringent quality control measures. The products are transported from IOC
refineries, terminal and depots to the corresponding NOC depots and retail dealers by tank
trucks.
At present NOC is working towards developing storage facilities for petroleum products to meet
the demand in Nepalese market. Therefore, demand of NOC is met through the purchase of
petroleum products from the IOC depots, Terminal and Refinery located near the border with
Nepal.
3.3 Recommendations
Some suggestions and policy recommendations are being put forward for the
1. To maintain the required level of storage facilities Nepal Oil Corporation has to
constantly increase its storage facilities.
pumps, packed dealers and kerosene dealers so, it requires very stringent quality
control measures.
Oil Corporation to global energy companies who have the clout to handle government
6. Nepal should call a global tender which can excite global companies including those
from India and China with experience in managing supply chains in landlocked
countries.
7. Adequate number of tankers should be made available to carry petroleum products
8. NOC should be overhauled by bringing proficient staffs and the supervision and
9. Proper transportation facilities, strong networking and chain of command and several
10. In order to improve supply chain management, concerned bodies have to create a
strong data bank, conduct a study as per the requirement of the market and implement
Agreement between Nepal Oil Corporation and Indian Oil Corporation, 2002
Code of conduct and directives issued to LPG industries and dealers at different periods by
Fisher, M.L., 1997, "What is the Right Supply Chain for Your Product?" Harvard
Business Review, March-April, pp. 105-1 16.
Government of Nepal. 2004. Draft Act on Entry of Private Sector in Petroleum Import Business.
Lewin, G., 2003, "A customer-led strategy for managing the downstream oil supply
M. A. Cohen and S. Mallik. Global Supply Chains: Research and Applications. Production
T. Davis. Effective Supply Chain Management. Sloan Management Review 34:35-46, 1993.
Websites
www.nepaloil.com.np
www.google.com
www.wikipedia.com
Appendices
Photographs