NRB Estimates Nepal’s Gasoline Spend at Rs 170 billion for FY 2017-18

Nepal awakened to a harsh reality when its fuel import bill increased to Rs 170.13 billion!

The 43.1 percent increase for FY 2017-18 was attributed to the rising dollar value, increased smuggling and a hike in crude oil prices.

Officials say that despite measures like reduced load-shedding hours, the oil import prices continued to increase. This resulted in Nepal’s widened trade deficit.

Nepal Oil Corporation (NOC) identified gasoline smuggling into India and the rising dollar value against the Nepali Rupee as reasons for Nepal’s high import bill.

Nepal Fuel Import Statistics FY 2017-18:

• As per Nepal Rastra Bank’s (NRB) macroeconomic report, Nepal’s import expenditure rose by an alarming Rs 60 billion in the previous fiscal year after remaining at moderate levels in FY 2013-14 and 2016-17
• According to NOC’s annual statistics, the country’s fuel imports increased by nearly 20 percent in the previous fiscal year
• Other statistics show that petrol imports rose by 20 percent to 484,781 kilolitres, diesel imports increased by 23 percent to 1,597,551 kilolitres and aviation fuel went up by 18 percent to 370,560 tons during the last fiscal
• NOC reports also indicate that petrol costs in Nepal are lesser than Indian prices. It costs 26.89 per litre in Nepal.

However, NOC Acting Managing Director Sushil Bhattarai said the increase in fuel imports was normal.

Petroleum prices in the international market increased from $46 per barrel to $75 per barrel. The exchange rate of the dollar rose to Rs 112 from Rs 102.

“A stronger greenback and higher oil prices in the international market are among the main reasons behind the sharp increase in the country’s import bill,” said Bhattarai.

Regular cross-border smuggling into India due to the difference in prices forced NOC to increase imports to make enough petrol available and tackle shortages.