2 reasons why fuel prices are likely to go up in Nepal again

NOC petroleum product

Kathmandu, February 19

For the past few days, student unions affiliated with various political parties have been protesting two recent fuel price hike decisions made by the Nepal Oil Corporation, the government-owned fuel distribution monopoly.

On the other hand, public transporters have put pressure on the government to increase the transport fare accordingly.

But, the government is not paying attention to either of these demands. Instead, it is planning to announce another round of price hike.

Sources say there are internal and external factors contributing to the fuel price hike.

1. International market

Internationally, the price of crude oil is increasing. Immediately after the peak of the Covid-19 crisis in the world, the price had dropped to USD 24.76 per barrel, but now, it has reached USD 63.35 this week.

Nepal Oil Corporation’s Executive Director Surendra Kumar Paudel says the continuous rise in the fuel price in the international market is natural, adding the fuel price could soon increase in Nepal again.

2. Too many taxes

In the meantime, there are some domestic reasons too. Last year, the government had decided to increase the tax on fuel by Rs 5 per litre, and the consumers are feeling its impact now. The government has been charging Rs 10 on a litre of fuel as the infrastructure development tax also.

Meanwhile, the government has recently increased the commission for fuel station owners.

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Nabin Dhungana is a business correspondent at Onlinekhabar.

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