India and Nepal announced the start of another joint oil project, India Today reported on Friday. Next month, the Motihari-Amlekhgunj oil pipeline project starts its commercial operation.
The Indian-Nepalese commercial cooperation strengthens with another bilateral project, the Ministry of Foreign Affairs (MFA) and Nepal Oil Corporation (NOC) confirmed on Friday. The exact date of the Motihari-Amlekhgunj oil pipeline’s commercial start has not been fixed, preparations are underway.
In August, Nepal will give the green light to fuel trade with India via the pipeline. On Friday, the virtual launch by Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi became one of the most anticipated business events in the region.
Along with reducing huge transportation cost for the NOC, commercial operation of the oil pipeline will also ensure a reduction in fuel price in the domestic market.
The MFA sources said there was also the possibility of the project being inaugurated by the heads of state of the two nations as President Bidhya Devi Bhandari, during her recent visit to India, had invited her Indian counterpart.
“While the first option is more likely, the two governments are also exploring the possibility of the second option,” said Indian MFA official.
India-Nepal oil pipeline becomes reality
Though the initial cost of the project was estimated to be INR 2.75 billion, where the Indian government would inject INR 2 billion, the NOC stated that total project cost escalated to almost INR 3.25 billion.
The idea of the oil pipeline was first proposed in 1996 but due to the series of misunderstandings, the important project finally edged closer to reality in 2014. The Indian PM Modi’s taking office made many business projects reality, and in 2015, both India and Nepal inked an agreement to execute the project.
The Motihari-Amlekhgunj oil pipeline project has been completed much ahead of its deadline and is ready for commercial operation.
“Commercial operation of the cross-border fuel project will bring down fuel price by at least one rupee per litre,” said deputy executive director at the NOC.