NOC hikes fuel prices

THE Nepal Oil Corporation (NOC) has jacked up fuel prices effective from Saturday afternoon. Diesel and kerosene prices have been hiked by Rs 1 per litre, while petrol has become dearer by Rs 2 per litre. As per the new rates, diesel/kerosene will cost Rs 100 per litre, while petrol will available for Rs 125 per litre. However, the price of liquefied petroleum gas (LPG) has been left unchanged. The state-owned oil monopoly has also raised the price of aviation fuel. The price of aviation fuel sold to domestic airlines has been hiked by Rs 10 per litre to Rs 130 per litre, and that sold to international carriers has been increased by $50 per kilo litre to $1,300 per kilo litre, according to Shiva Prasad Pudasaini, spokesperson for NOC. A meeting of NOC’s board of directors on Saturday afternoon took a decision to this effect. Pudasaini said NOC’s ballooning losses prompted the oil company to increase the fuel prices. “With this revision, NOC’s monthly projected loss will come down to Rs 1 billion from Rs 1.15 billion,” he said. NOC dropped its plan to raise the price of LPG fearing possible political backlash, sources said. NOC faces Rs 733 million in monthly losses from its LPG business alone. On a LPG cylinder, NOC incurs Rs 523 loss. Officials said the petroleum price hike in Nepal was in line with the rise in Brent crude oil price in the international market. “The revision was made on a cost-sharing basis,” said Pudasaini, adding the burden has been equally divided among the government, NOC and consumers. Consumer rights activists, however, criticised the government’s move to increase fuel prices, saying it violated the election code of conduct. “Besides, it will impact market prices significantly on the onset of the festival season,” said consumer rights activists Prem Lal Maharjan. “It clearly shows how irresponsible the government is in protecting consumers already grappling with double-digit inflation.” The hefty hike on aviation fuel prices is also likely to force Nepali carriers to raise airfares. As airlines passes the burden of increased fuel prices to their passengers in the form of hike in fuel surcharges, air tickets are likely to be expensive on the onset of festive seasons. Domestic airlines are permitted to increase the fuel surcharge if the fuel price gœs up by Rs 4 and above. The Airlines Operators’ Association of Nepal is scheduled to meet on Sunday over the matter. With the Saturday’s revision, NOC will enjoy a profit of Rs 27 on a litre of aviation fuel sold to domestic carriers. Airlines officials said fuel cost has already affected their profits and the additional hike has worried them.