Globally, oil prices have been rising. The price of a barrel of crude oil, as of Feb 16, 2022, stood at 90-96 dollars in the international market. The value of the USD in comparison to the Nepali rupee stands at Rs. 119.98.  As the rupee devalues, the cost of fuel gets more expensive.

Apart from that, the tax imposed by the government has also been making the price of petroleum dearer. As per the data of February 1, Nepal Oil Corporation (NOC) buys petrol from Indian Oil Corporation (IOC) for 84 rupees and 32 paisa per litre but the government adds 58.48 rupees as tax, therefore contributing to the rise in price. NOC has to pay the tax amount to the Government of Nepal.

Likewise, IOC provides NOC diesel at 85 rupees 42 paisa, which is later imposed with a tax of 41 rupees 16 paisa per litre.

The state supplier then finalizes the price of petroleum, usually at a loss after factoring the transportation, storage and administration costs of the corporation.

Meanwhile, as per the data published on the NOC website on February 16, the purchasing cost of petrol for NOC is Rs 161.05 per litre and is bearing a loss of Rs 10.05 per litre. Similally, the buying cost of Diseal stands at Rs 140.48 per litre and is bearing a loss of Rs 15.48 per litre, while Rs 2135 is the buying cost of LGP per cylinder and is bearing a loss of Rs 560.75 per cylinder.

In Nepal, the price of petroleum products has reached an all-time high as the state-owned petroleum supplier continuously increases the price owing to the losses it was incurring from the sales.

Nepal Oil Corporation has been updating the price of petroleum products after it gets the revised rate from the Indian Oil Corporation every fortnight.

With the new adjustments, a litre of petrol in Nepal now costs 142 rupees, while diesel and kerosene each cost 125 rupees a litre.

With the rise in oil prices and the associated inflation, young people have been protesting the price hike.

As per the NOC officials, the loss of the government entity stands at 24 billion Nepali rupees and has been covering the debts and losses by taking loans.

Here, we are able to gain insight from the NOC on the rising prices:

By : Raju Upreti and Nishant Singh Gurung