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Rise in prices of Petroleum Products in Nepal
By KTM Reporter in Kathmandu
On June 10, 2008, in view of the price rise of petroleum products in the world market and its unsustainable loss for supporting the unrealistic prices of petroleum products, Nepal Oil Corporation (NOC) with the instructions from the Government of Nepal increased the prices of petroleum products as follow:
1. Petrol from Rs 80 per liter to Rs 100 per liter
2. Diesel from Rs 56 per liter to Rs 70 per liter
3. Kerosene from Rs 51 per liter to Rs 65 liter
4. Cooking gas from Rs 1,100 per cylinder to Rs 1,200 per cylinder.
Even with this price rise the NOC would have a loss of Rs 1.5 billion per month according to the NOC press release. The Government of Nepal agreed to provide the NOC with one billion rupees as a subsidy on the petroleum products. The government also reduced various taxes on the petroleum products and also permitted the private companies to import and distribute petroleum products.
Recently, the Government of India increased the prices of petroleum products as follow:
1. Petrol to Rs 94
2. Diesel to Rs 65
3. Kerosene to Rs 60
The slight difference in prices of petroleum products between Nepal and India goes in favor of Nepal, as the slightly higher prices in Nepal would encourage the private companies to bring in more petroleum products thus ending the shortage of petroleum products during the two-year term of the Honorable Prime Minister, Girija Prasad Koirala, and Finance Minister Dr. Ram Sharan Mahat.
