Talks between officials of the Indian Oil Corporation (IOC) and the state-owned Nepal Oil Corporation (NOC) have concluded in Kathmandu, without making any substantial progress, a local website reported on Sunday.

According to thehimalayantimes.com report, the five-member IOC team, led by its commercial general manager M. Nene, arrived here on Friday to hold talks with top NOC officials, industry minister and the finance minister on terms of payment for dues owed to the IOC by the NOC.

The IOC team is understood to have asked the NOC to pay the outstanding dues at the earliest, stating that it cannot supply on credit and bear such huge dues for such a long time.

When asked about the NOC's request to the IOC not to charge interest on the due amount, deputy general manager at NOC Umesh Prasad Dahal said: "IOC officials asked us to clear off the principal due amount first. They expressed their constraints as IOC has also taken loans from various Indian banks and it has to be accountable to shareholders."

The NOC owes some 6 billion Nepali rupees (85.7 million U.S. dollars) to the IOC, according to the report.

During the India visit of Nepali Prime Minister Girija Prasad Koirala in June, India had agreed to simplify the payment modules.

On Thursday, Indian envoy to Nepal, Shiv Shankar Mukherjee, said the issue of payment to be made by the NOC to the IOC will be settled very soon.

The NOC has been facing unprecedented losses when the government did not adjust the price of the petroleum products at par with the international market. The price of crude oil in the international market has reached as high as 78 dollars per barrel.

The NOC owes debt of over 10 billion rupees (142.8 million dollars) including payment to the IOC and national private and government banks. The daily losses of the NOC is over 250 million rupees (3.57 million dollars) per day.

The NOC will also propose extending the duration of payment to the last of every month.

At present, the NOC has to make payments on the 15th of every month. The NOC is expected to propose for decreasing the interest rate for the dues, which is set at 10.5 percent currently.

Source: Xinhua