Nepal hit hard by fuel shortage

Already facing 14 hours daily power cuts, a fuel crisis has hit Nepal for the past week and serpentine queues of two-wheelers and cars outside petrol pumps has become a common sight. HT reports

Already facing 14 hours daily power cuts, a fuel crisis has hit Nepal for the past week and serpentine queues of two-wheelers and cars outside petrol pumps has become a common sight.

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A strike by petrol tanker operators and inability of Nepal Oil Corporation to import oil from Indian Oil Corporation due to its failure to pay existing dues are the reasons for the present crisis.

At present NOC owes nearly US $50 million to IOC, the sole supplier of oil to Nepal. Surge in global oil prices due to the Libyan crisis is also a reason for the problem in Nepal.

As a result of the increasing oil prices, on April 16 IOC hiked its rates further spiraling NOC's estimated monthly loss from NRs 1.77 billion to NRs 1.96 billion.

The new Jhalanath Khanal government has decided to dole out NRs 15 billion from development budget to bail out debt-ridden NOC out of the present crisis.

"Such a huge resource diverted for consumption has distorted rational consumption behavior of public," former finance secretary Rameshore Khanal was quoted in Republica.

At present NOC is selling petrol as a loss of NRs 6.30 per litre and diesel at loss of NRs 23.26 per litre. A fresh price hike is expected soon to ease burden on the government exchequer.