India-Nepal Current Affairs

IOC to build new oil terminal at Motihari to supply fuel to Nepal

The Indian Oil Corporation (IOC) has planned to build a new oil terminal at Motihari in Bihar to supply fuel to Nepal via the planned pipeline up to Amlekganj in Nepal. The old terminal functioning at Raxaul in Bihar will be shut down as it does not conform to the current OISD (Oil Industry Safety Directorate) guidelines. The decision to shift the terminal from Raxaul to Motihari has been taken keeping in mind the current safety guidelines.

Oil Industry Safety Directorate (OISD) is a technical directorate that formulates the regulatory measures to enhance safety of the Indian oil and gas industry. It functions under the ministry of petroleum and natural gas.

The 69-km Motihari-Amlekganj pipeline will be built at a cost of Rs.325 crore. Nepal is giving at most importance to the project by giving it a national priority status. Also, as per the initial agreement, a new 200 km pipeline would be laid between Patna and Motihari and will be utilised if there is a delay in operation of the new terminal at Motihari. Already a pipeline between Barauni (where a refinery exists) and Patna exists. IOC expects to operationalise the Motihari-Amlekganj pipeline after 30 months of receiving statutory clearances. Nepal wants the pipeline to be extended up to Chitwan for which the IOC has been asked to prepare a detailed feasibility report (DFR).


In August 2015, the India and Nepal signed a memorandum of understanding (MoU) for a product pipeline. As a follow-up, IOC and Nepal Oil Corporation entered into a MoU for laying down of the pipeline. At the beginning, it was decided that the pipeline would be laid from Raxaul to Amlekganj, but later it was decided to extend it till Motihari. Recently, the fuel supply agreements between India and Nepal have been extended to five years. Nepal receives around 2 lakh kilolitres of fuel from IOC every month.



India, Nepal renew petroleum supply agreement

India and Nepal have signed an agreement to renew supply of petroleum to Nepal for a period of five years i.e. till 2022.

The renewed agreement, which was overseen by the Petroleum Ministers of both countries, was signed even as both sides pledged to build a new pipeline for LPG.

Key Facts
  • The agreement was signed between Indian Oil Corporation Ltd. (IOCL) and Nepal Oil Company (NOC) and was overseen by Petroleum Ministers of both countries.
  • The renewed agreement is an umbrella document between the two countries detailing the continued supply of petroleum, oil and lubricant products.
  • It also puts in place an institutional mechanism for cooperation in the areas of additional services and technical assistance between the two countries.
  • Under it IOC will supply about 1.3 million tonnes of fuel annually to Nepal with a promise to double the volume by 2020.

Indian Oil has been supplying petroleum and petroleum products to Nepal since 1974. The renewing of the agreement is considered India’s continued support to Nepal in meeting its complete hydrocarbon requirement. It has pledged to continue supplies, though petroleum supply to Nepal was severely hit during 2015-16 due to the blockade on the border. Thus, the new agreement also maintains the fuel supply exclusivity to India. 

Motihari-Amlekhgunj Pipeline
  • Both countries are also working to further deepen engagement in the oil and gas sector, including construction of petroleum product Motihari-Amlekhgunj Pipeline.
  • Once the pipeline completed, it will further ensure continuous and uninterrupted supply of products to Nepal.
  • India also agreed to extend the proposed Raxaul-Amlekhganj product pipeline to Chitwan and to start work on the pipeline in 2017-18.