The state-owned Nepal Oil Corporation (NOC) has demanded Rs 2 billion from the Ministry of Finance for payment to Indian Oil Corporation (IOC).

Talks with the ministry were initiated after the NOC received a letter from IOC saying the payment processes would be simplified if the NOC cleared its dues in one installment, Kantipur daily reported Saturday. The corporation wrote a letter to the ministry on Friday, demanding the Rs 2 billion grants.

At present, the NOC owes over Rs. 2 billion to the IOC.

The IOC had notified that the monthly payment duration could be extended to the last day of the month if the existing dues are cleared. According to earlier agreements, the NOC needs to clear the month’s payment by 15 of the English month.

The report further said the IOC would accept monthly payment in three installments if this condition were met. This would end the NOC’s problem regarding interests, the daily quoted an official at the NOC as saying. The IOC has demanded 10 percent interest if payment was delayed.

Even though the NOC was closing the month’s transaction by the month’s end in previous months but it has not been able to pay January’s installment. The Indian oil agency has sent a bill of Rs 2.8 billion for the month of January.

The NOC has been running into heavy losses for the last few years particularly after the government stopped providing subsidy saying the corporation should manage its costs on its own. Currently, the corporation is facing a loss of around Rs 570 million a month.