The increase in the price of petroleum products has directly affected the kitchens of the common people, not only by increasing the cost of vegetables and food, but also by increasing the cost of transportation and production.
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The ongoing tensions in West Asia are also starting to affect Nepali cuisine. Nepal Oil Corporation has increased the prices of petroleum products effective from Monday evening, citing the increase in prices in the global market due to the war.
The increase in the price of petroleum products has not only increased the cost of vegetables and food but also the cost of transportation and production, which has directly affected the kitchens of the common people.
Amidst the fuel crisis and price hikes around the world, the Corporation has increased petrol by Rs 15 per liter and diesel and kerosene by Rs 10. According to the price hike in the international market, the prices in Nepal have also had to be increased due to the increase in prices from the Indian Oil Corporation (IOC). However, he informed that the prices have been set in such a way that some amount is borne from the Price Stabilization Fund when selling without maintaining the new rate sent by the IOC. With the latest price hike, petrol has reached Rs 172 per liter and diesel Rs 152 per liter.
The Corporation has a monopoly on the import and supply of petroleum products. The price of petroleum products is determined by the Corporation's Board of Directors. The committee is chaired by the Secretary of the Ministry of Commerce and Supplies. The committee has been determining the price of petroleum products in Nepal based on the price sent by the Indian Oil Corporation.
IOC sends the prices of petrol, diesel and kerosene every 15-15 days and the prices of LP gas and aviation fuel every 30-30 days. The Corporation claims that the selling prices in Nepal are fixed according to the price list sent by IOC.
Although it is said that there is an automatic price determination system in Nepal, sometimes when the prices from India fluctuate, they are kept stable here. Even though the price was increased by five rupees per liter from India 15 days ago, the Corporation did not increase it. Bhatta informed that the prices were not adjusted because it was election time at that time. ‘This time, petrol has increased by 31 rupees per liter and diesel by 54 rupees per liter,’ Bhatta said, ‘That is why they had to be increased.’ The Corporation has stated that the prices have also increased in Nepal due to the sudden increase in prices in the international market and will be reduced immediately as soon as the prices there decrease. The Corporation also claims that there will be a loss of 3.93 billion rupees in 15 days after the latest price increase.
The price increase in petroleum products risks increasing the transportation costs and increasing the prices of edible oil along with pulses, oil, rice and so on. Even vegetables and domestic food items will become more expensive in the coming days. Economists estimate that consumer prices could increase by 8 to 9 percent if the war in West Asia is not stopped immediately. Economist Keshav Acharya estimates that consumer prices could increase by at least 9 percent. ‘If the corporation runs into a loss, the government must pay for it. In such a situation, the money that should be spent on development and construction will have to be withdrawn and given to the corporation,’ he said. ‘One-third of the total production of chemical fertilizers in the world market is produced in the Gulf. Therefore, the price of chemical fertilizers will also skyrocket.’ Acharya says that this will affect inflation from Nepali kitchens to production.
According to a study by the International Monetary Fund, if the price of oil increases by $10 per barrel, the world economy will shrink by 0.15 percent. And, according to the Fund, inflation will increase by 0.4 percentage points. Similarly, if the price of oil increases by $100 per barrel, inflation will increase by 1.2 percentage points worldwide and the economy will shrink by 0.4 percent. Therefore, economists say that the increase in the price of petroleum products is a risk that Nepal's economy will shrink and prices will increase.
Ram Prasad Gyawali, head of the Central Department of Economics at Tribhuvan University, says that it will be difficult to control inflation as the price of petroleum products will increase, making daily basic necessities more expensive. Gyawali argues that the government will have to increase the wage rate of workers as a result of this pressure.
Similarly, the National Federation of Nepal Transport Entrepreneurs has demanded an adjustment in vehicle fares, citing the increase in the price of petroleum products. In a statement issued today, the General Secretary of the Federation, Deknath Gautam, said that serious attention has been drawn to the price increase in petroleum products by Nepal Oil Corporation last night and that this will directly affect the transport business. The Federation has demanded that the government of Nepal adopt scientific methods to control internal leakage and consumption of petroleum products within Nepal Oil Corporation and ensure smooth supply of petroleum products. The Federation has stated that since public transport vehicles are operated using diesel/petrol fuel, fluctuations in the price of petroleum products have a direct impact on public transport operations. The Federation has also demanded that the government adjust the fares of federal routes from the Department of Transport Management and the fares of provinces from all seven provincial ministries as soon as possible.
