Base Oils

Nepal launches probe into possible mis-declaration of base oil imports

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The Nepali government has launched a probe into the illegal importation of diesel fuel through the Biratnagar Customs Office located near the southeastern tip of Nepal, after it was revealed that a large volume of diesel fuel entered the country as base oils and furnace oils, while the country was under fuel rationing.

Fuel rationing was imposed by the government from September 27, 2015, following an Indian blockade that resulted in fuel shortages in Nepal which was lifted only last month.

There is a difference in customs duty between diesel fuel and base oil of NPR 5 (USD 0.05) per litre. The customs duty for diesel fuel is NPR 20 (USD 0.18) per litre, while for base oil is NPR 15 (USD 0.14) per litre.

Data from the Biratnagar Customs Office showed that 91 consignments of base oil and furnace oil entered Nepal during the blockade. Customs data also showed that lubricant manufacturer Fujima Oil Company based in Biratnagar imported 219,960 kilolitres of base oils in five consignments during the blockade, local media reported. Base oils are primarily used as the key ingredient in lubricant manufacturing.

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