Middle East Crisis: Despite Price Hikes, Nepal Oil Corporation Faces Losses, Loan Possibility Increases

Despite petroleum product prices reaching historic highs, Nepal Oil Corporation is facing a weekly loss of nearly NPR 800 crore, according to its chief. He warned that if tensions in the Middle East do not ease, the government or financial institutions may need to provide loans to the corporation.

Following last month’s attacks on Iran by the United States and Israel, Nepal Oil Corporation has increased petroleum product prices at least four times. The latest price hike, effective from midnight Friday, raised petrol by NPR 17 per liter, diesel and furnace oil by NPR 25 per liter, cooking gas cylinders by NPR 100 each, and aviation fuel by NPR 6 per liter. Despite these adjustments, the corporation projects a weekly loss of NPR 781 crore.

After the recent increase, petrol prices range between NPR 216.50 and NPR 219 per liter, while diesel prices are set between NPR 204 and NPR 207 per liter. Consumers now have to pay NPR 2,010 for a 14.2-kg gas cylinder. A few days ago, the cabinet decided to grant a 50 percent exemption on customs duties and infrastructure development tax on petrol, diesel, and furnace oil imports.

Chandikaprasad Bhatt, Executive Director of Nepal Oil Corporation, appealed in a public statement issued Friday to reduce fuel consumption and adopt frugality. He said, “If a single motorcycle rider saves one liter of petrol daily, the state could save approximately NPR 22 crore in taxes each day.” He added that a savings of NPR 390 crore could be achieved within 15 days and urged everyone to exercise prudence in petroleum product usage.