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Nepal's fuel distribution monopoly increases pump prices to reduce its losses

Nepal's fuel distribution monopoly increases pump prices to reduce its losses

Nepal's state-owned oil import and distribution monopoly sharply raised the price of cooking fuel, diesel and gasoline Tuesday, saying the move was necessary to reduce its losses and increase supplies.
Effective immediately, the pump price of gasoline rose 25 percent to 100 rupees a liter (US$5.70 a gallon), while diesel went up 25 percent to 70 rupees a liter (US$3.80 a gallon), Nepal Oil Corp. said in a statement.
The retail price of a liter of kerosene meanwhile rose 27 percent to 65 rupees (US$3.61 a gallon), the company said.
Nepal Oil Corp. said it was compelled to increase prices, after recently losing up to 2.7 billion rupees (US$39 million) a month due to the rapid rise in global oil prices. The company statement predicted its monthly losses would be reduced to about 1.7 billion rupees (US$25 million) due to the retail price increases.
The government has also promised to provide 1 billion rupees (US$15 million) to help save the agency, it said, adding that the government would continue to subsidize gasoline, kerosene and diesel.
Oil prices hovered around US$134 a barrel in Asia on Tuesday afternoon.
Most gas stations in Nepal were closed Tuesday as the Petroleum Dealers' Association met to discuss the new prices.
Nepal imports all its oil products from neighboring India. Nepal Oil Corp. has in recent weeks struggled to pay the Indian Oil Corp. because of its financial troubles, and fuel imports have dropped off as a result. This has led to long lines outside gas stations, with drivers sometimes waiting for hours and still not being able to fill their tanks because supplies have run out.
The fuel price increases are likely to have a knock-on effect on the cost of Nepal's food and other supplies, which are largely distributed by diesel-powered trucks in this landlocked Himalayan nation.
The newly elected communist-led Constituent Assembly did not immediately comment on the fuel price increase. Nepal Oil Corp. said the coalition government approved the price hikes.
Some people appeared to accept the price increases.
"We have been facing fuel shortages for months now. If this increase helps to end the crisis then it is fine with me," said Santi Lama, a taxi driver in Katmandu.
Others, however, thought the government should be more accountable.
Small protests took place in the capital of Katmandu, but no major violence was reported. College students briefly blocked traffic in the city to demand the price hike be withdrawn.
"The administration has once again passed the cost to the common people," said Surya Shrestha, a shopkeeper.


Updated : 2021-02-26 21:43 GMT+08:00