The India-Nepal petroleum pipeline inaugurated today
The Nepal Reset

The India-Nepal petroleum pipeline inaugurated today

Introduction

This article talks about the India-Nepal petroleum pipeline that was inaugurated by the Prime Ministers of India and Nepal (Mr. Narendra Modi and Mr. KP Sharma Oli respectively). It would facilitate transporting of fuel from Barauni refinery in Bihar's Begusarai district to Amalekhgunj in southeastern Nepal, situated across the border from Raxaul in East Champaran district.


Background

The Motihari-Amalekhgunj pipeline project was first proposed in 1996, but progress was not great. The project received an impetus after PM Modi’s visit to Kathmandu in 2014. In 2015, the two governments signed an agreement to execute the project; however, political tensions, including India’s alleged economic blockade of Nepal acted as roadblocks in the implementation. A couple of years later, that is, in 2017, the Indian Oil Corporation (IOC) signed a petroleum trade agreement to supply about 1.3 million tonnes of fuel annually to Nepal with a promise to double the volume by 2020.


Current Context

Both the Prime Ministers inaugurated the petroleum pipeline from their offices in New Delhi and Kathmandu. According to the spokesperson of Nepal Oil Corporation (NOC) Mr. Birendra Goit, the pipeline measuring 69 km. would drastically reduce cost of transporting fuel to Nepal, which is landlocked from India. The Amalekhgunj fuel depot is expected to possess the capacity to store a maximum of 16,000 kiloliters of petroleum products.

In July this year, India’s ambassador to Nepal Mr. Manjeev Singh Puri described this as a ‘game changer for Nepal’ as it would help in tackling the oil storage problem and do away with transportation of petroleum products through tankers. Moreover, it would enable smooth, cost-effective and environment-friendly supply of petroleum products to Nepal. The project was initially expected to cost Rs. 275 crore of which India was to bear around Rs. 200 crore. Subsequently, the NOC stated the cost of the project escalated to nearly Rs. 325 crore. Mr. Sushil Bhattarai, the Deputy Executive Director of NOC opined that commercial operation of the cross-border fuel project will bring down fuel price by at least one rupee per liter.


Conclusion

The decision of both the governments to establish a petroleum pipeline will strengthen relations between the two nations which have had their ups and downs. This augurs well especially for India as Nepal has tended more towards China in recent times.

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