: (1) For all purposes under this agreement and for the purpose of income tax, the price of petroleum shall be determined in accordance with the provisions of this section.
(2) The price of crude oil sold during the quarter from the contract area for export shall be determined on the basis of:
(a) the weighted average export price received by the Government of Nepal or the contractor for the crude oil sold from the contract area during the previous quarter or,
(b) In the case that at least ten (10) percent of the total quantity of crude oil produced from the contract area during the previous quarter has not been sold for export under clause (a), the department and the contractor,
(1) The weighted average export price obtained for crude oil of equal weight and quality exported from all production areas of Nepal and
(2) The export price prevailing in the market for crude oil of equal weight and quality produced in the Arabian Gulf region, the price determined by mutual consent after all relevant factors have been appropriately added to both.
(3) For the purpose of sub-section (2), "export price" means the actual price received in convertible foreign currency at a valuation point from an unrelated party in a close sale transaction (arm's length sales transaction) without the provision of a lease or special concession as collateral. . While calculating the export value, pricing center and FOB outside Nepal. Transportation, storage, handling, export facilities, commissions, brokerage fees and any other infrastructure, services or expenses between export centers will be reduced in such a way that they do not exceed the prevailing rates between independent parties in the international petroleum industry. If such infrastructures are fully or partially owned by any party or related party of this agreement, its fee (tariff) shall be based on Article 33 or established principles. Explanation: "Pricing center" means such a center within Nepal where services or facilities are included in the cost of petroleum.
(4) Sales for the Nepalese marketThe price of crude oil to be sold will be equal to the price determined for the respective quarterly period as per sub-section (2).
(5) The price of natural gas produced and sold during the quarterly period shall be determined at the weighted average net price received by the Government of Nepal or the contractor in accordance with the contract or contracts for the sale of such natural gas. When entering into an agreement to sell such natural gas, the contractor shall try to obtain the maximum price under favorable terms and conditions at the time of entering into the agreement, considering all related matters including the purpose for which such gas will be used, the price of the fuel to be replaced by it.
(6) If the contractor finds it necessary to determine the price by mutual consent in accordance with clause (b) of sub-section (2), the contractor shall notify the department as soon as possible before the end of the current quarterly period. After consultation between the department and the contractor regarding the development of factual information for the basis of pricing, the contractor shall submit to the department a written proposal for the applicable price for crude oil for the next quarter. After that, the department and the contractor will meet as soon as possible before the quarterly period in which the price is applied to discuss and agree on such price. Until such mutual approval, the price of the previous quarter will continue to apply. But after the price of the respective quarter is finally approved, it will be adjusted accordingly.