The hike, which came with immediate effect, has necessitated consumers to pay Rs 120 per liter of petrol and Rs 89 per liter of diesel and kerosene in the Kathmandu Valley.[break]
The corporation, however, left the prices of liquefied petroleum gas, the popular household fuel, unchanged at Rs 1,415 per cylinder (14.2 kgs), even though the product is causing a loss of Rs 676.08 million every month.
“The raise was a compulsion, in the absence of due adjustment of retail prices in line with the import rates, we were suffering a loss of over Rs 1.34 billion each month,” said NOC Spokesperson. Following the hike NOC estimates its loss for this month will shrink to Rs 1.02 billion.
With the fresh hike, consumers in Nepal have braved 17 percent rise in prices of petrol over the span of eight-and-a-half months of this fiscal year. Likewise, diesel, largely regarded as industrial fuel, and kerosene too has become expensive by around 19 percent during the period.
Price of LPG, which is largely consumed by politically active urban consumers, on the other hand, has gone up by just around 8 percent.
Such pricing decision, meanwhile, has widened gap between LPG and kerosene, making kerosene - previously known as poor´s fuel - expensive by Rs 32 per liter. At present retail rate, each liter of LPG costs consumers Rs 57, whereas kerosene costs Rs 89.
“But who´s bothered about how much low income families that cannot even afford one time investment of around Rs 5,000 (required to install LPG-based cooking system) or people in rural hinterland using fossil fuel just to light lamp are paying for the fuel? With fewer leaders living in rural Nepal, our politics has turned urban-centric and leaders feel obliged to politically active urban consumers, even though they can afford the price,” said an official at Ministry of Commerce and Supplies (MoCS).
NOC has been consistently raising the prices of kerosene after MoCS chose easy way of checking fuel adulteration, and decided to fix kerosene prices at par with diesel instead of taking other stringent steps to control anomalies in the market. But this smooth operation on kerosene pricing has come at a cost of loss coming from LPG business, 40 percent which is consumed by commercial consumers like hotels, restaurants, industries and automotive sector.
Currently, NOC is suffering a loss of Rs 563.40 on each cylinder of gas, no matter whether it is consumed by general public or industries. Despite the latest hike, the corporation is still suffering a loss of Rs 10.52 per liter of diesel.
On petrol and kerosene, however, the corporation is earning a profit of Rs 3.77 and Rs 4.88 per liter respectively. It is also earning profit of about Rs 20 on a liter of aviation fuel sold to domestic flights and Rs 25.25 per liter of aviation fuel sold to international flights.
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